TY - JOUR
T1 - Cournot meets Bayes-Nash
T2 - A discontinuity in behavior in finitely repeated duopoly games
AU - Argenton, Cédric
AU - Ivanova-Stenzel, Radosveta
AU - Müller, Wieland
N1 - Publisher Copyright:
© 2023 Elsevier Inc.
PY - 2024/3
Y1 - 2024/3
N2 - We conduct a series of Cournot duopoly market experiments with a high number of repetitions and fixed matching. Our treatments include markets with (a) complete cost symmetry and complete information, (b) slight cost asymmetry and complete information, and (c) varying cost asymmetries and incomplete information. For the case of complete cost symmetry and complete information, our data confirm the well-known result that duopoly players achieve, on average, partial collusion. However, as soon as any level of cost asymmetry or incomplete information is introduced, observed average individual quantities are remarkably close to the static Bayes-Nash equilibrium predictions.
AB - We conduct a series of Cournot duopoly market experiments with a high number of repetitions and fixed matching. Our treatments include markets with (a) complete cost symmetry and complete information, (b) slight cost asymmetry and complete information, and (c) varying cost asymmetries and incomplete information. For the case of complete cost symmetry and complete information, our data confirm the well-known result that duopoly players achieve, on average, partial collusion. However, as soon as any level of cost asymmetry or incomplete information is introduced, observed average individual quantities are remarkably close to the static Bayes-Nash equilibrium predictions.
KW - Bayes-Nash equilibrium
KW - Bayesian game
KW - Collusion
KW - Cooperation
KW - Cournot
KW - Experimental economics
KW - Repeated games
U2 - 10.1016/j.geb.2023.12.004
DO - 10.1016/j.geb.2023.12.004
M3 - Article
AN - SCOPUS:85181117593
SN - 0899-8256
VL - 144
SP - 1
EP - 12
JO - Games and Economic Behavior
JF - Games and Economic Behavior
ER -