Stability of the Cournot process - experimental evidence

Steffen Huck, Hans-Theo Normann and Jörg Oechssler

International Journal of Game Theory, 2002, vol. 31, issue 1, 123-136

Abstract: We report results of experiments designed to test the predictions of the best-reply process. In a Cournot oligopoly with four firms, the best-reply process should theoretically explode if demand and cost functions are linear. We find, however, no experimental evidence of such instability. Moreover, we find no differences between a market which theoretically should not converge to Nash equilibrium and one which should converge because of inertia. We investigate the power of several learning dynamics to explain this unpredicted stability.

Keywords: best-reply; process; ·; Cournot; oligopoly; ·; learning; ·; experiments; ·; imitation. (search for similar items in EconPapers)
Date: 2002-10-02
Note: Received May 1997/Revised June 2002
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Citations: View citations in EconPapers (39)

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Related works:
Working Paper: Stability of the Cournot Process - Experimental Evidence (2002)
Working Paper: Stability of the Cournot Process - Experimental Evidence (1997)
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