Arbeitspapier
Excess capacity and pricing in Bertrand-Edgeworth markets: Experimental evidence
We conduct experiments testing the relationship between excess capacity and pricing in repeated Bertrand-Edgeworth duopolies and triopolies. We systematically vary the experimental markets between low excess capacity (suggesting monopoly) and no capacity constraints (suggesting perfect competition). Controlling for the number of firms, higher production capacity leads to lower prices. However, the decline in prices as industry capacity rises is less pronounced than predicted by Nash equilibrium, and a model of myopic price adjustments has greater predictive power. With higher capacities, Edgeworth-cycle behavior becomes less pronounced, causing lower prices. Evidence for tacit collusion is limited and restricted to low-capacity duopolies.
- ISBN
-
978-3-86304-066-6
- Sprache
-
Englisch
- Erschienen in
-
Series: DICE Discussion Paper ; No. 67
- Klassifikation
-
Wirtschaft
Noncooperative Games
Design of Experiments: General
Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection
- Thema
-
tacit collusion
excess capacity
Edgeworth cycles
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Fonseca, Miguel A.
Normann, Hans-Theo
- Ereignis
-
Veröffentlichung
- (wer)
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Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE)
- (wo)
-
Düsseldorf
- (wann)
-
2012
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:43 MEZ
Datenpartner
Dieses Objekt wird bereitgestellt von:
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Objekttyp
- Arbeitspapier
Beteiligte
- Fonseca, Miguel A.
- Normann, Hans-Theo
- Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE)
Entstanden
- 2012
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