A note comparing the capacity setting performance of the Kreps-Scheinkman duopoly model with the Cournot duopoly model in a laboratory setting

David Goodwin and Stuart Mestelman

International Journal of Industrial Organization, 2010, vol. 28, issue 5, 522-525

Abstract: The paper reports the results of 39 laboratory duopoly markets for which pricing institution and participant experience are treatments. Cournot (C) duopolies (quantity precommitment and a price determined to clear the market) are contrasted with Kreps-Scheinkman (KS) duopolies (quantity precommitment and posted prices). Inexperienced participants in KS markets have much more difficulty selecting capacities consistent with the theoretical predictions than do those in C markets. With experience, the differences disappear.

Keywords: Duopoly; Laboratory; experiment; Quantity; precommitment; Posted; prices; Price; competition; Market-clearing; prices; Experience (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (12)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:indorg:v:28:y:2010:i:5:p:522-525

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