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Competition and cooperation in markets. The experimental case of a winner-take-all setting

Listed author(s):
  • Ottone, Stefania
  • Ponzano, Ferruccio

The aim of this experiment is twofold. First of all, we want to investigate whether a winner-take-all scenario where subjects with homogeneous skills meet more than once stimulates subjects' cooperation. Secondly, we want to compare agents' tendency to cooperate in settings with different levels of competition. We ran three treatments. The first one reproduces the classical public good game. The second environment represents a perfect competition market, while in the third treatment we consider a winner-take-all market. The most relevant result we obtain is that while perfect competition forces players to be efficient and to behave as they were self-interested, a winner-take-all market induces strategic cooperation.

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File URL: http://www.sciencedirect.com/science/article/B6W5H-4XNF42Y-2/2/22556f5e4a89912418a2eea365695bfc
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Article provided by Elsevier in its journal Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics).

Volume (Year): 39 (2010)
Issue (Month): 2 (April)
Pages: 163-170

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Handle: RePEc:eee:soceco:v:39:y:2010:i:2:p:163-170
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/620175

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  1. Ananish Chaudhuri & Sara Graziano & Pushkar Maitra, 2006. "Social Learning and Norms in a Public Goods Experiment with Inter-Generational Advice -super-1," Review of Economic Studies, Oxford University Press, vol. 73(2), pages 357-380.
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  6. Nicholas Bardsley & Peter Moffatt, 2007. "The Experimetrics of Public Goods: Inferring Motivations from Contributions," Theory and Decision, Springer, vol. 62(2), pages 161-193, March.
  7. Chen, Zhijun, 2006. "Fighting Collusion in Tournaments," MPRA Paper 872, University Library of Munich, Germany.
  8. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer;Economic Science Association, vol. 10(2), pages 171-178, June.
  9. Matthias Kräkel & Petra Nieken & Judith Przemeck, 2008. "Risk Taking in Winner-Take-All Competition," Bonn Econ Discussion Papers bgse7_2008, University of Bonn, Germany.
  10. Kahneman, Daniel & Tversky, Amos, 1979. "Prospect Theory: An Analysis of Decision under Risk," Econometrica, Econometric Society, vol. 47(2), pages 263-291, March.
  11. Fischbacher, Urs & Thöni, Christian, 2008. "Excess entry in an experimental winner-take-all market," Journal of Economic Behavior & Organization, Elsevier, vol. 67(1), pages 150-163, July.
  12. Christoph Engel, 2006. "How Much Collusion. A Meta-Analysis On Oligopoly Experiments," Working Paper Series of the Max Planck Institute for Research on Collective Goods 2006_27, Max Planck Institute for Research on Collective Goods.
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