Article ID: | iaor20033270 |
Country: | Germany |
Volume: | 31 |
Issue: | 1 |
Start Page Number: | 123 |
End Page Number: | 136 |
Publication Date: | Jan 2002 |
Journal: | International Journal of Game Theory |
Authors: | Huck S., Normann H.-T., Oechssler J. |
Keywords: | voting |
We report results of experiments designed to test the predictions of the best-reply process. In a Cournot oligopoly with four firms, the best-reply process should theoretically explode if demand and cost functions are linear. We find, however, no experimental evidence of such instability. Moreover, we find no differences between a market which theoretically should not converge to Nash equilibrium and one which should converge because of inertia. We investigate the power of several learning dynamics to explain this unpredicted stability.