Competitive behavior in market games: Evidence and theory
John Duffy (),
Alexander Matros and
Ted Temzelides ()
Journal of Economic Theory, 2011, vol. 146, issue 4, 1437-1463
We explore whether competitive outcomes arise in an experimental implementation of a market game, introduced by Shubik (1973) . Market games obtain Pareto inferior (strict) Nash equilibria, in which some or possibly all markets are closed. We find that subjects do not coordinate on autarkic Nash equilibria, but favor more efficient Nash equilibria in which all markets are open. As the number of subjects participating in the market game increases, the Nash equilibrium they achieve approximates the associated competitive equilibrium of the underlying economy. Motivated by these findings, we provide a theoretical argument for why evolutionary forces can lead to competitive outcomes in market games.
Keywords: Market; games; Full; Nash; equilibrium; Market; power; Competition; Experimental; economics; Evolutionary; stability (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (12) Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:146:y:2011:i:4:p:1437-1463
Access Statistics for this article
Journal of Economic Theory is currently edited by A. Lizzeri and K. Shell
More articles in Journal of Economic Theory from Elsevier
Series data maintained by Dana Niculescu ().