Duopoly Behavior in Asymmetric Markets: An Experimental Evaluation.

Experimental duopolies are analyzed to answer two questions: Are asymmetric duopolies less likely to collude than symmetric duopolies? Is the time it takes to reach an equilibrium affected by asymmetry? In a repeated game where output is the choice , the authors have data for nineteen (respectively, twenty-one) subject pairs where both agents are low-cost (respectively, high-cost) and twenty-five subject pairs where one agent is high-cost and one is low-cost. Subjects make choices for at least thirty-five periods. Results indicate that asymmetric markets are less cooperative and take longer to reach equilibrium than symmetric markets. Copyright 1992 by MIT Press.