We introduce a generalized theoretical approach to study imitation and subject it to rigorous experimental testing. In our theoretical analysis we find that the different predictions of previous imitation models are due to different informational assumptions, not to different behavioral rules....

We report results of experiments designed to test the predictions of the best-reply process. In a Cournot oligopoly with four firms, the best-reply process should theoretically explode if demand and cost functions are linear. We find, however, no experimental evidence of such instability....

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...

The endowment effect describes the fact that people demand much more to give up an object than they are willing to spend to acquire it. The existence of this effect has been documented in numerous experiments. We attempt to explain this effect by showing that evolution favors individuals whose...

The endowment effect describes the fact that people demand much more to give up an object than they are willing to spend to acquire it. The existence of this effect has been documented in numerous experiments. We attempt to explain this effect by showing that evolution favors individuals whose...

A well-known result by Vega-Redondo (1997) [18] implies that in symmetric Cournot oligopolies, imitation leads to the Walrasian outcome. We show that this result is not robust to the slightest asymmetry in costs, since every outcome where agents choose identical actions will be played some...