Through Trial & Error to Collusion
Steffen Huck (),
Hans-Theo Normann () and
Game Theory and Information from University Library of Munich, Germany
In this note we study a very simple trial & error learning process in the context of a Cournot oligopoly. Without any knowledge of the payoff functions players increase, respectively decrease, their quantity by one unit as long as this leads to higher profits. We show that this process converges to a collusive outcome.
Keywords: learning; game theory; oligopoly; collusion (search for similar items in EconPapers)
JEL-codes: C72 L13 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-evo, nep-gth and nep-mic
Date: 1998-11-19, Revised 1998-11-24
Note: Pages: 12; figure included in the second file
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Working Paper: Through trial & error to collusion (1999)
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Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwpga:9811004
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