Stability of the Cournot process – experimental evidence

Stability of the Cournot process – experimental evidence

0.00 Avg rating0 Votes
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: , ,
Keywords: voting
Abstract:

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.

Reviews

Required fields are marked *. Your email address will not be published.