Making Sense of the Experimental Evidence on Endogenous Timing in Duopoly Markets

Luis Santos-Pinto ()

MPRA Paper from University Library of Munich, Germany

Abstract: The prediction of asymmetric equilibria with Stackelberg outcomes is clearly the most frequent result in the endogenous timing literature. Several experiments have tried to validate this prediction empirically, but failed to find support for it. By contrast, the experiments find that simultaneous-move outcomes are modal and that behavior in endogenous timing games is quite heterogeneous. This paper generalizes Hamilton and Slutsky’s (1990) endogenous timing games by assuming that players are averse to inequality in payoffs. I explore the theoretical implications of inequity aversion and compare them to the empirical evidence. I find that this explanation is able to organize most of the experimental evidence on endogenous timing games. However, inequity aversion is not able to explain delay in Hamilton and Slutsky’s endogenous timing games.

Keywords: Endogenous Timing; Cournot; Stackelberg; Inequity Aversion (search for similar items in EconPapers)
JEL-codes: C72 D43 D63 L13 (search for similar items in EconPapers)
Date: 2006-02-06, Revised 2007-04-27
New Economics Papers: this item is included in nep-com, nep-exp and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Related works:
Journal Article: Making sense of the experimental evidence on endogenous timing in duopoly markets (2008)
Working Paper: Making sense of the experimental evidence on endogenous timing in duopoly markets (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:3142

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