Stability of the Cournot Process - Experimental Evidence
We report results of a series of experiments designed to test the stability of the best reply process. With linear demand and cost functions, the process is stable if and only if there are less than three firms in the market. However, we find no experimental evidence of such instability in a four firm oligopoly. Moreover, there are no differences between a market which theoretically should not converge to Nash equilibrium and one which should converge because of inertia.
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.:
- 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.
- Abbink, Klaus & Abdolkarim Sadrieh, 1995. "RatImage - research Assistance Toolbox for Computer-Aided Human Behavior Experiments," Discussion Paper Serie B 325, University of Bonn, Germany.
- Huck, Steffen & Normann, Hans-Theo & Oechssler, Jorg, 1999.
"Learning in Cournot Oligopoly--An Experiment,"
Royal Economic Society, vol. 109(454), pages 80-95, March.
- Steffen Huck & Hans-Theo Normann & Joerg Oechssler, 1997. "Learning in Cournot Oligopoly - An Experiment," Game Theory and Information 9707009, EconWPA, revised 22 Jul 1997.
- Fernando Vega-Redondo, 1997. "The Evolution of Walrasian Behavior," Econometrica, Econometric Society, vol. 65(2), pages 375-384, March.
- Fernando Vega Redondo, 1996. "The evolution of walrasian behavior," Working Papers. Serie AD 1996-05, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
- Holt, Charles A, 1985. "An Experimental Test of the Consistent-Conjectures Hypothesis," American Economic Review, American Economic Association, vol. 75(3), pages 314-325, June.
- Cox, James C. & Walker, Mark, 1998. "Learning to play Cournot duopoly strategies," Journal of Economic Behavior & Organization, Elsevier, vol. 36(2), pages 141-161, August.
- R. D. Theocharis, 1960. "On the Stability of the Cournot Solution on the Oligopoly Problem," Review of Economic Studies, Oxford University Press, vol. 27(2), pages 133-134. Full references (including those not matched with items on IDEAS)