Please use this identifier to cite or link to this item:
http://hdl.handle.net/2072/1926
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| Title: | 24 |
| Authors: | Abbink, Klaus
Brandts, Jordi |
| Other authors: | Universitat Autònoma de Barcelona. Unitat de Fonaments de l'Anàlisi Econòmica
Institut d'Anàlisi Econòmica |
| Keywords: | Oligopolis
Preus -- Control |
| Creation Date: | |
| Series/Report no.: | Working papers; 523.02 |
| Abstract: | We study the relation between the number of firms and market power in experimental oligopolies. Price competition under decreasing returns involves a wide interval of pure strategy equilibrium prices. We present results of an experiment in which two, three and four identical firms repeatedly interact in this environment. Less collusion with more firms leads to lower average prices. With more than two firms, the predominant market price is 24. A simple imitation model captures this phenomenon. For the long run, the model predicts that prices converge to the Walrasian outcome, but for the intermediate term the modal price is 24 |
| Appears in Collections: | Working papers
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