Playing Cournot Although They Shouldn't - Endogenous Timing in Experimental Duopolies with Asymmetric Cost

In this note, we experimentally investigate the extended game with action commitment in a Cournot duopoly with asymmetric cost. Risk dominance considerations allow to select a unique equilibrium in which the low-cost firm is the Stackelberg leader. The data, however, do not support the theory as simultaneous-move play is modal. Average output choices are in line with the Cournot equilibrium. This suggests that Cournot is a much more robust predictor for competition in markets than theory suggests

MoreLess

Year of publication:	2004
Authors:	Fonseca, Miguel Alexandre ; Huck, Steffen ; Normann, Hans-Theo
Publisher:	[S.l.] : SSRN
Subject:	Duopol \| Duopoly \| Spieltheorie \| Game theory \| Experiment \| Kosten \| Costs
Description of contents:	Abstract [papers.ssrn.com]