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The Effect of Payoff Tables on Experimental Oligopoly Behavior

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  • Gürerk, Özgür
  • Selten, Reinhard

Abstract

We explore the effects of the provision of an information-processing instrument - payoff tables - on behavior in experimental oligopolies. In one experimental setting, subjects have access to payoff tables whereas in the other setting they have not. It turns out that this minor variation in presentation has non-negligible effects on participants' behavior, particularly in the initial phase of the experiment. In the presence of payoff tables, subjects tend to be more cooperative. As a consequence, collusive behavior is more likely and quickly to occur.

Suggested Citation

  • Gürerk, Özgür & Selten, Reinhard, 2010. "The Effect of Payoff Tables on Experimental Oligopoly Behavior," MPRA Paper 22489, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:22489
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    References listed on IDEAS

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    Cited by:

    1. Axel Sonntag & Daniel John Zizzo, 2015. "Institutional authority and collusion," Southern Economic Journal, Southern Economic Association, vol. 82(1), pages 13-37, July.
    2. repec:kap:expeco:v:20:y:2017:i:3:d:10.1007_s10683-016-9500-5 is not listed on IDEAS
    3. Bruttel, Lisa & Friehe, Tim, 2015. "A note on making humans randomize," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 58(C), pages 40-45.
    4. Harmsen - van Hout, Marjolein J.W. & Dellaert, Benedict G.C. & Herings, P. Jean-Jacques, 2016. "Heuristic decision making in network linking," European Journal of Operational Research, Elsevier, vol. 251(1), pages 158-170.
    5. Duersch, Peter & Eife, Thomas, 2013. "Price Competition in an Inflationary Environment," Working Papers 0547, University of Heidelberg, Department of Economics.

    More about this item

    Keywords

    Collusion; Cournot oligopoly; payoff tables; bounded rationality; framing; presentation effect;

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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