From Imitation to Collusion - A Comment

Jörg Oechssler, Alex Roomets and Stefan Roth

No 588, Working Papers from University of Heidelberg, Department of Economics

Abstract: In oligopoly, imitating the most successful competitor yields very competitive outcomes. This theoretical prediction has been confirmed experimentally by a number of studies. A recent paper by Friedman et al. (2015) qualifies those results in an interesting way: while they replicate the very competitive results for the first 25 to 50 periods, they show that when using a much longer time horizon of 1200 periods, results slowly turn to more and more collusive outcomes. We replicate their result for duopolies. However, with 4 firms none of our oligopolies becomes permanently collusive. Instead, the average quantity always stays above the Cournot-Nash equilibrium quantity. Thus, it seems that “four remain many” even with 1200 periods.

Keywords: imitation; experiment. (search for similar items in EconPapers)
Date: 2015-04-14
New Economics Papers: this item is included in nep-com and nep-exp
Note: This paper is part of http://archiv.ub.uni-heidelberg.de/volltextserver/view/schriftenreihen/sr-3.html
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://nbn-resolving.de/urn:nbn:de:bsz:16-heidok-185793 Frontdoor page on HeiDOK (text/html)
https://archiv.ub.uni-heidelberg.de/volltextserver ... 0Roth_2015_dp588.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:awi:wpaper:0588

Access Statistics for this paper

More papers in Working Papers from University of Heidelberg, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Gabi Rauscher ( this e-mail address is bad, please contact ).