Multiple behavioral rules in Cournot oligopolies

Carlos Alós-Ferrer and Alexander Ritschel

Journal of Economic Behavior & Organization, 2021, vol. 183, issue C, 250-267

Abstract: We study intra-individual behavioral heterogeneity in an experimental Cournot oligopoly. Previous empirical results in this setting have demonstrated convergence to competitive outcomes, in agreement with theoretical predictions assuming that players imitate successful opponents. We postulate that players sometimes rely on imitation of successful behavior, and sometimes best reply to the actions of others. Testable predictions are obtained from a model allowing for multiple behavioral rules which accounts for differences in the cognitive nature of the underlying decision processes. Those include non-trivial response time interactions depending on whether the rules share a common prescription (alignment) or not (conflict), a classification which is ex ante observable. The results confirm the hypotheses and support the presence of multiple behavioral rules at the individual level.

Keywords: Cournot oligopoly; Imitation; Best reply; Multiple behavioral rules (search for similar items in EconPapers)
JEL-codes: C72 C91 D91 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:183:y:2021:i:c:p:250-267

DOI: 10.1016/j.jebo.2020.12.034

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