RT Generic
T1 The effect of experience in Cournot play
A1 Ferreira, José Luis
A1 Kujal, Praveen
A1 Rassenti, Stephen
A2 Universidad Carlos III de Madrid. Departamento de Economía, 
AB Strategic play requires that players in oligopolies be more sophisticated than in perfectly competitive markets. It thus seems reasonable to assume that player experience becomes important as the environment gets more complicated. We find that subject experience indeed plays an important role. While inexperienced symmetric duopolies play around the Nash-Cournot quantity, experienced duopolies reduce output and get closer to the monopolistic outcome. Both inexperienced and experienced symmetric quadropolies,however, produce output above the Nash-Coumot equilibrium but, even in this case, output is lower for experienced quadropolies. Experience, however, does not make markets less competitive with the introduction of cost asymmetry. Under cost asymmetry, and relative to the equilibrium prediction, high cost firms produce more output than low cost firms.Analysis of individual data tells us that experienced duopolies and quadropolies adjustoutput in the same direction as their rivals. Due to the strategic substitutability of quantitychoice, we interpret this as an attempt at tacitly colluding. This is true for both duopolies and quadropolies.
SN 2340-5031
YR 2010
FD 2010-05
LK https://hdl.handle.net/10016/9403
UL https://hdl.handle.net/10016/9403
LA eng
DS e-Archivo
RD 20 may. 2024