Cournot Competition between Teams: An Experimental Study

Burkhard Schipper and Philippe Raab
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Philippe Raab: Department of Economics, University of California Davis

No 77, Working Papers from University of California, Davis, Department of Economics

Abstract: In the economic literature on market competition, firms are often modelled as single decision makers and the internal organization of the firm is neglected (unitary player assumption). However, as the literature on strategic delegation suggests, one can not generally expect that the behavior of teams is equivalent to the behavior of individuals in Cournot competition. Nevertheless, there are models of team-organization such that team-firms and individual firms are behaviorally equivalent. This provides a theoretical foundation for the unitary player assumption in Cournot competition. We show that this assumption is robust in experiments, which is in contrast to experimental results on price competition.

Keywords: Unitary player assumption; Group behavior; Experiments; Theory of the firm. (search for similar items in EconPapers)
JEL-codes: C72 C91 C92 D21 D23 D43 L13 L22 M52 (search for similar items in EconPapers)
Pages: 29
Date: 2006-09-21
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Related works:
Journal Article: Cournot competition between teams: An experimental study (2009)
Working Paper: Cournot Competition between Teams: An Experimental Study (2004)
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