Arbeitspapier

Experimentally Observed Imitation and Cooperation in Price Competition on the Circle

This paper reports an experiment on a location game, the so-called "Price-Competition on the Circle." There are n symmetric firms equidistantly located on a circle. Consumers are uniformly distributed. Each consumer buys one and only one unit from that firm whose price, including the cost of transportation, is the lowest, provided such a price is below a maximum willingness to pay. Experiments, extended over 200 periods, were run with 3, 4, and 5 participants. Subjects did not receive any information about the relationship between prices and profits, but they received feedback on prices and profits of two neighbors after each period. The evaluation compares predictions derived from imitation equilibrium (Selten and Ostmann 2001) and Cournot equilibrium, as well as symmetric joint-profit maximization. The results qualitatively favor imitation equilibrium, as long as no cooperation is observed.

Sprache
Englisch

Erschienen in
Series: Bonn Econ Discussion Papers ; No. 19/2002

Klassifikation
Wirtschaft
Other Spatial Production and Pricing Analysis
Oligopoly and Other Imperfect Markets
Design of Experiments: Laboratory, Group Behavior
Noncooperative Games
Thema
Imitation
Cooperation
Location
Experiments
Imitationswettbewerb
Räumliche Preistheorie
Experiment
Nash-Gleichgewicht
Nichtkooperatives Spiel
Theorie

Ereignis
Geistige Schöpfung
(wer)
Selten, Reinhard
Apesteguia, José
Ereignis
Veröffentlichung
(wer)
University of Bonn, Bonn Graduate School of Economics (BGSE)
(wo)
Bonn
(wann)
2002

Handle
Letzte Aktualisierung
10.03.2025, 11:45 MEZ

Datenpartner

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Objekttyp

  • Arbeitspapier

Beteiligte

  • Selten, Reinhard
  • Apesteguia, José
  • University of Bonn, Bonn Graduate School of Economics (BGSE)

Entstanden

  • 2002

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