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Cournot Competition between Teams: An Experimental Study

  • Philippe Raab
  • Burkhard C. Schipper

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

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Paper provided by University of Bonn, Germany in its series Bonn Econ Discussion Papers with number bgse13_2004.

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Length: 30
Date of creation: Jul 2004
Handle: RePEc:bon:bonedp:bgse13_2004
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