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Cournot competition between teams: An experimental study

  • Raab, Philippe
  • Schipper, Burkhard C.

In the literature on market competition, firms are often modeled as individual decision makers and the internal organization of the firm is neglected (unitary player assumption). However, as the literature on strategic delegation suggests, one cannot generally expect that the behavior of teams is equivalent to the behavior of individuals in Cournot competition. Nevertheless, there are models of team-organizations such that team-firms and individual firms are behaviorally equivalent. This provides a theoretical foundation for the unitary player assumption in Cournot competition. We show that this assumption is robust in experiments, which is in contrast to experimental results on price competition.

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Article provided by Elsevier in its journal Journal of Economic Behavior & Organization.

Volume (Year): 72 (2009)
Issue (Month): 2 (November)
Pages: 691-702

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Handle: RePEc:eee:jeborg:v:72:y:2009:i:2:p:691-702
Contact details of provider: Web page: http://www.elsevier.com/locate/jebo

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