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Cournot meets Bayes-Nash: A discontinuity in behavior in finitely repeated duopoly games
Argenton,Cédric Ivanova-Stenzel,Radosveta Müller,Wieland
Argenton,Cédric
Ivanova-Stenzel,Radosveta
Müller,Wieland
Abstract
We conduct a series of Cournot duopoly market experiments with a high number of repetitions and fixed matching. Our treatments include markets with (a) complete cost symmetry and complete information, (b) slight cost asymmetry and complete information, and (c) varying cost asymmetries and incomplete information. For the case of complete cost symmetry and complete information, our data confirm the well-known result that duopoly players achieve, on average, partial collusion. However, as soon as any level of cost asymmetry or incomplete information is introduced, observed average individual quantities are remarkably close to the static Bayes-Nash equilibrium predictions.
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Publisher Copyright: © 2023 Elsevier Inc.
Date
2024-03
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Keywords
Bayes-Nash equilibrium, Bayesian game, Collusion, Cooperation, Cournot, Experimental economics, Repeated games, D43 - Oligopoly and Other Forms of Market Imperfection, L13 - Oligopoly and Other Imperfect Markets, C72 - Noncooperative Games, C92 - Laboratory, Group Behavior
Citation
Argenton, C, Ivanova-Stenzel, R & Müller, W 2024, 'Cournot meets Bayes-Nash : A discontinuity in behavior in finitely repeated duopoly games', Games and Economic Behavior, vol. 144, pp. 1-12. https://doi.org/10.1016/j.geb.2023.12.004
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info:eu-repo/semantics/openAccess