Nash Equilibrium and Buyer Rationing Rules: Experimental Evidence

Jamie Brown-Kruse

Economic Inquiry, 1993, vol. 31, issue 4, 631-46

Abstract: Laboratory experiments compare the results of two different buyer rationing rules on Bertrand-Edgeworth duopoly markets. The two rationing rules, a value queue and a random queue, specify the ordering of buyers and generate different predictions under otherwise identical conditions. These experiments show market outcome can change significantly with a change in the ordering of buyers. The direction of these changes agrees with the predictions of the stage-game Nash equilibrium. Thus, the single-shot Nash equilibrium is shown to have predictive power even in repeated games. Copyright 1993 by Oxford University Press.

Date: 1993
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