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Tie-breaking rules and divisibility in experimental duopoly markets

Daniela Puzzello ()

Journal of Economic Behavior & Organization, 2008, vol. 67, issue 1, 164-179

Abstract: We investigate pricing behavior of sellers in duopoly markets with posted prices and market power. The two treatment variables are given by tie-breaking rules and divisibility of the price space. The first treatment variable deals with the rule under which demanded units are allocated between sellers in case of a price tie. A change in divisibility is modeled by making the sellers' price space finer or coarser. We find that the incidence of perfect collusion is significantly higher under the sharing tie-breaking rule than under the random (coin-toss) one, especially when the price space is less divisible.

Date: 2008
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Related works:
Working Paper: Tie-Breaking Rules and Divisibility in Experimental Duopoly Markets (2007) Downloads
Working Paper: Tie-Breaking Rules and Divisibility in Experimental Duopoly Markets (2006) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:67:y:2008:i:1:p:164-179

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Journal of Economic Behavior & Organization is currently edited by Houser, D. and Puzzello, D.

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