Repeated price competition between individuals and between teams
We conducted an experimental study of price competition in a duopolistic market. The market was operationalized as a repeated game between two "teams" with one, two, or three players in each team. We found that asking (and winning) prices were significantly higher in competition between individuals than in competition between two- or three-person teams. There were no general effects of team size, but prices increased with time when each team member was paid his or her own asking price and decreased when the team's profits were divided equally. This result is consistent with a simple model of individual learning.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Roth, Alvin E. & Erev, Ido, 1995. "Learning in extensive-form games: Experimental data and simple dynamic models in the intermediate term," Games and Economic Behavior, Elsevier, vol. 8(1), pages 164-212.
- Kirstein, Roland & Kirstein, Annette, 2004.
"Inefficient Intra-Firm Incentives Can Stabilize Cartels in Cournot Oligopolies,"
CSLE Discussion Paper Series
2004-09, Saarland University, CSLE - Center for the Study of Law and Economics.
- Roland Kirstein & Annette Kirstein, 2007. "Inefficient Intra-Firm Incentives Can Stabilize Cartels in Cournot Oligopolies," FEMM Working Papers 07004, Otto-von-Guericke University Magdeburg, Faculty of Economics and Management.
- Plott, Charles R., 1989. "An updated review of industrial organization: Applications of experimental methods," Handbook of Industrial Organization, in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 2, chapter 19, pages 1109-1176 Elsevier.
- Dufwenberg, Martin & Gneezy, Uri, 1998.
"Price Competition and Market Concentration: An Experimental Study,"
Working Paper Series
1998:8, Uppsala University, Department of Economics.
- Dufwenberg, Martin & Gneezy, Uri, 2000. "Price competition and market concentration: an experimental study," International Journal of Industrial Organization, Elsevier, vol. 18(1), pages 7-22, January.
- Dufwenberg, M. & Gneezy, U., 1998. "Price Competition and Market COncentration: An Experimental Study," Papers 1998-08, Uppsala - Working Paper Series.
- Dufwenberg, Martin & Gneezy, Uri, 1999. "Price Competition and Market Concentration: An experimental Study," Research Papers in Economics 1999:4, Stockholm University, Department of Economics.
- John B Van Huyck & Raymond C Battalio & Richard O Beil, 1997.
"Tacit coordination games, strategic uncertainty, and coordination failure,"
Levine's Working Paper Archive
1225, David K. Levine.
- Van Huyck, John B & Battalio, Raymond C & Beil, Richard O, 1990. "Tacit Coordination Games, Strategic Uncertainty, and Coordination Failure," American Economic Review, American Economic Association, vol. 80(1), pages 234-48, March.
- J. B. Van Huyck & R. C. Battalio & R. O. Beil, 2010. "Tacit coordination games, strategic uncertainty, and coordination failure," Levine's Working Paper Archive 661465000000000393, David K. Levine.
- Jean Tirole, 1988. "The Theory of Industrial Organization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262200716, June.
- Raab, Philippe & Schipper, Burkhard C., 2009.
"Cournot competition between teams: An experimental study,"
Journal of Economic Behavior & Organization,
Elsevier, vol. 72(2), pages 691-702, November.
- Burkhard C. Schipper & Philippe Raab, 2006. "Cournot Competition between Teams: An Experimental Study," Working Papers 626, University of California, Davis, Department of Economics.
- Philippe Raab & Burkhard C. Schipper, 2004. "Cournot Competition between Teams: An Experimental Study," Bonn Econ Discussion Papers bgse13_2004, University of Bonn, Germany.
- Gunnthorsdottir, Anna & Rapoport, Amnon, 2006. "Embedding social dilemmas in intergroup competition reduces free-riding," Organizational Behavior and Human Decision Processes, Elsevier, vol. 101(2), pages 184-199, November.
- Wilfred Amaldoss & Robert J. Meyer & Jagmohan S. Raju & Amnon Rapoport, 2000. "Collaborating to Compete," Marketing Science, INFORMS, vol. 19(2), pages 105-126, November.
- Erev, Ido & Roth, Alvin E, 1998. "Predicting How People Play Games: Reinforcement Learning in Experimental Games with Unique, Mixed Strategy Equilibria," American Economic Review, American Economic Association, vol. 88(4), pages 848-81, September.
- Gary Bornstein, 2002. "Intergroup conflict: Individual, group and collective interests," Discussion Paper Series dp297, The Federmann Center for the Study of Rationality, the Hebrew University, Jerusalem.
- Gary Bornstein & Uri Gneezy, 2002. "Price Competition Between Teams," Experimental Economics, Springer, vol. 5(1), pages 29-38, June.
When requesting a correction, please mention this item's handle: RePEc:eee:jeborg:v:66:y:2008:i:3-4:p:808-821. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If references are entirely missing, you can add them using this form.