Experimental Cournot oligopoly and inequity aversion

Details

Serval ID
serval:BIB_3CD35DC96ABB
Type
Article: article from journal or magazin.
Collection
Publications
Institution
Title
Experimental Cournot oligopoly and inequity aversion
Journal
Theory and Decision
Author(s)
Iris D., Santos-Pinto L.
ISSN
0040-5833
Publication state
Published
Issued date
01/2014
Peer-reviewed
Oui
Volume
76
Number
1
Pages
31-45
Language
english
Abstract
This paper explores the role of inequity aversion as an explanation for observed behavior in experimental Cournot oligopolies. We show that inequity aversion can change the nature of the strategic interaction: quantities are strategic substitutes for sufficiently asymmetric output levels but strategic complements otherwise. We find that inequity aversion can explain why: (i) some experiments result in higher than Cournot-Nash production levels while others result in lower, (ii) collusion often occurs with only two players whereas with three or more players market outcomes are very close to Cournot-Nash, and (iii) players often achieve equal profits in asymmetric Cournot oligopoly.
Keywords
Inequity aversion, Cournot oligopoly, Experiments
Web of science
Create date
10/02/2014 12:57
Last modification date
20/08/2019 14:33
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