Is a “Firm” a Firm? A Stackelberg Experiment

Andreas Hildenbrand

No 201229, MAGKS Papers on Economics from Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung)

Abstract: Industrial organization is mainly concerned with the behavior of large firms. Experimental industrial organization therefore faces a problem: How can firms be brought into the laboratory? The main approach relies on framing: Call individuals “firms”! This experimental approach is not in line with modern industrial organization, according to which a firm’s market behavior is also determined by its organizational structure. In this paper, a Stackelberg experiment is considered in order to answer the question whether framing individual decision making as organizational decision making or implementing an organizational structure is more effective in generating profit-maximizing behavior. Firms are either represented by individuals or by teams. I find that teams’ quantity choices are more in line with the assumption of profit maximization than individuals’

Keywords: industrial organization; Stackelberg game; individual behavior; team behavior; framing; experimental economics. (search for similar items in EconPapers)
JEL-codes: C72 C91 C92 D43 L13 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2012
New Economics Papers: this item is included in nep-com, nep-exp and nep-ind
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https://www.uni-marburg.de/en/fb02/research-groups ... 2012_hildenbrand.pdf First version, 2012 (application/pdf)

Related works:
Journal Article: Is a firm a firm? A Stackelberg experiment (2013)
Working Paper: Is a "firm" a firm? A Stackelberg experiment (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:mar:magkse:201229

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