Experimental Tests of Consciously Parallel Behaviour in Oligopoly
Stephen Martin () and
Hans-Theo Normann ()
No 1997-07, CIE Discussion Papers from University of Copenhagen. Department of Economics. Centre for Industrial Economics
The purpose of this research is to examine, in experimental oligopoly markets, (a) whether parallel pricing patterns emerge when communication among players is limited to cheap talk announcements; (b) whether such pricing patterns, if they emerge, lead to payoffs that exceed those players would receive in Nash equilibrium of the one-shot game. Results indicate that announcements and price matching lead to margins that exceed those of static Nash equilibrium, while falling short of joint profit maximization.
Pages: 37 pages
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Published in: Louis Phlips (ed.): Applied Industrial Economics, Cambridge University Press, 1998, 123-151
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