Extensive field evidence shows individuals' decisions in settings involving uncertainty depend on their peers' decisions. One hypothesized cause of peer group effects is social interaction effects: an individual's utility from an action is enhanced by others taking the same action. We employ a...

Bertrand competition under decreasing returns involves a wide interval of pure strategy Nash equilibrium prices. We first present results of experiments in which two, three and four identical firms repeatedly interact in this environment. More firms lead to lower average prices. However, prices...