Adaptive Behavior By Single-Product And Multiproduct Price Setting Firms In Experimental Markets
Using data obtained from experiments reported in García-Gallego (1998) and García- Gallego and Georgantzís (2001), we estimate a simple model of adaptive behavior which could describe pricing in a market whose demand conditions are unknown to the firms. Divergence between the limit of observed prices over time and theoretical predictions concerning multiproduct firms could be partially explained as a result of learning limitations associated with multiple task-oriented problem solving. However, optimal multiproduct pricing requires that subjects use two different kinds of rules: one concerning responses to prices charged by other players and another concerning pricing of own products. Even in a simple environment like the one studied here, subjects seem to be far more successful in learning a number than learning a rule.
|Date of creation:||May 2001|
|Publication status:||Published by Ivie|
|Contact details of provider:|| Postal: C/ Guardia Civil, 22, Esc 2a, 1o, E-46020 VALENCIA|
Phone: +34 96 319 00 50
Fax: +34 96 319 00 55
Web page: http://www.ivie.es/
More information through EDIRC
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.:
- Dawid, Herbert, 1997. "Learning of equilibria by a population with minimal information," Journal of Economic Behavior & Organization, Elsevier, vol. 32(1), pages 1-18, January.
- Rassenti, Stephen & Reynolds, Stanley S. & Smith, Vernon L. & Szidarovszky, Ferenc, 2000. "Adaptation and convergence of behavior in repeated experimental Cournot games," Journal of Economic Behavior & Organization, Elsevier, vol. 41(2), pages 117-146, February.
- Rosemarie Nagel & Nicolaas J. Vriend, 1999.
"An experimental study of adaptive behavior in an oligopolistic market game,"
Journal of Evolutionary Economics,
Springer, vol. 9(1), pages 27-65.
- Nagel, Rosemarie & Nicolaas J. Vriend, 1997. "An Experimental Study of Adaptive Behavior in an Oligopolistic Market Game," Discussion Paper Serie B 408, University of Bonn, Germany.
- Rosemarie Nagel & Nicolaas J. Vriend, 1997. "An experimental study of adaptive behavior in an oligopolistic market game," Economics Working Papers 230, Department of Economics and Business, Universitat Pompeu Fabra.
- Macleod, W. Bentley, 1985. "A theory of conscious parallelism," European Economic Review, Elsevier, vol. 27(1), pages 25-44, February.
- Macleod, W. Bentley, "undated". "A theory of conscious parallelism," CORE Discussion Papers RP 629, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Macleod, W.B., 1984. "A theory of conscious parallelism," CORE Discussion Papers 1984040, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Vriend, Nicolaas J., 1997. "Will reasoning improve learning?," Economics Letters, Elsevier, vol. 55(1), pages 9-18, August.
- James W. Friedman, 1976. "Reaction Functions as Nash Equilibria," Review of Economic Studies, Oxford University Press, vol. 43(1), pages 83-90.
- Robson, Arthur J, 1986. "The Existence of Nash Equilibria in Reaction Functions for Dynamic Models of Oligopoly," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 27(3), pages 539-544, October.
- Nick Feltovich & John Duffy, 1999. "Does observation of others affect learning in strategic environments? An experimental study," International Journal of Game Theory, Springer;Game Theory Society, vol. 28(1), pages 131-152.
- John Duffy & Nick Feltovich, 1997. "Does Observation of Others Affect Learning in Strategic Environments? An Experimental Study," Levine's Working Paper Archive 592, David K. Levine.
- Kelly, Frank S., 1995. "Laboratory subjects as multiproduct monopoly firms: An experimental investigation," Journal of Economic Behavior & Organization, Elsevier, vol. 27(3), pages 401-420, August.
- Nagel, Rosemarie & Vriend, Nicolaas J, 1999. "Inexperienced and Experienced Players in an Oligopolistic Market Game with Minimal Information," Industrial and Corporate Change, Oxford University Press, vol. 8(1), pages 41-65, March.
- Cyert, Richard M & DeGroot, Morris H, 1973. "An Analysis of Cooperation and Learning in a Duopoly Context," American Economic Review, American Economic Association, vol. 63(1), pages 24-37, March.
- Antoni Bosch-DomËnech & Nicolaas J. Vriend, 2003. "Imitation of successful behaviour in cournot markets," Economic Journal, Royal Economic Society, vol. 113(487), pages 495-524, April.
- Antoni Bosch-Domènech & Nicolaas J. Vriend, 1998. "Imitation of succesful behavior in Cournot markets," Economics Working Papers 269, Department of Economics and Business, Universitat Pompeu Fabra, revised May 1999.
- Offerman, Theo & Sonnemans, Joep, 1998. "Learning by experience and learning by imitating successful others," Journal of Economic Behavior & Organization, Elsevier, vol. 34(4), pages 559-575, March.
- Garcia Gallego, Aurora, 1998. "Oligopoly experimentation of learning with simulated markets," Journal of Economic Behavior & Organization, Elsevier, vol. 35(3), pages 333-355, April.
- Durham, Yvonne, 2000. "An experimental examination of double marginalization and vertical relationships," Journal of Economic Behavior & Organization, Elsevier, vol. 42(2), pages 207-229, June.
- Vriend, Nicolaas J., 2000. "An illustration of the essential difference between individual and social learning, and its consequences for computational analyses," Journal of Economic Dynamics and Control, Elsevier, vol. 24(1), pages 1-19, January.
- S. Baranzoni & P. Bianchi & L. Lambertini, 2000. "Multiproduct Firms, Product Differentiation, and Market Structure," Working Papers 368, Dipartimento Scienze Economiche, Universita' di Bologna.
- Cyert, Richard M. & DeGroot, Morris H., 1971. "Interfirm learning and the kinked demand curve," Journal of Economic Theory, Elsevier, vol. 3(3), pages 272-287, September.
- Garcia-Gallego, Aurora & Georgantzis, Nikolaos, 2001. "Multiproduct activity in an experimental differentiated oligopoly," International Journal of Industrial Organization, Elsevier, vol. 19(3-4), pages 493-518, March.
- Harrington Jr. , Joseph E., 1995. "Experimentation and Learning in a Differentiated-Products Duopoly," Journal of Economic Theory, Elsevier, vol. 66(1), pages 275-288, June. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:ivi:wpasad:2001-13. 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: (Departamento de Edición)
If references are entirely missing, you can add them using this form.