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Capacity choices and price competition in experimental markets

  • Anderhub, Vital
  • Güth, Werner
  • Kamecke, Ulrich
  • Normann, Hans-Theo

In the heterogeneous experimental oligopoly markets of this paper, sellers first choose capacities and then prices. In equilibrium, capacities should correspond to the Cournot prediction. In the experimental data, given capacities, observed price setting behavior is in general consistent with the theory. Capacities converge above the Cournot level. Sellers rarely manage to cooperate.

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Paper provided by Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes in its series SFB 373 Discussion Papers with number 2001,10.

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Date of creation: 2001
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Handle: RePEc:zbw:sfb373:200110
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  1. Davis, Douglas D., 1999. "Advance production and Cournot outcomes: an experimental investigation," Journal of Economic Behavior & Organization, Elsevier, vol. 40(1), pages 59-79, September.
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