Trial & Error to Collusion - The Discrete Case

In this note we study a very simple trial & error learning process in the context of a Cournot oligopoly. Without any knowledge of the payoff functions players increase, respectively decrease, their quantity by one unit as long as this leads to higher profits. We show that despite the absence of any coordination or punishing device this process converges to a collusive outcome.

MoreLess

Year of publication:	2000-05
Authors:	Huck, Steffen ; Normann, Hans-Theo ; Oechssler, Jörg
Institutions:	University of Bonn, Germany
Subject:	learning \| Cournot oligopoly

More details

Extent:	application/pdf
Series:	Bonn Econ Discussion Papers.
Type of publication:	Book / Working Paper
Language:	English
Classification:	C72 - Noncooperative Games ; L13 - Oligopoly and Other Imperfect Markets
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10004968407