Through trial & error to collusion

Steffen Huck, Jörg Oechssler and Hans-Theo Normann

No 1999,57, SFB 373 Discussion Papers from Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes

Abstract: 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 despite the absence of any coordination or punishing device this process converges to a collusive outcome.

JEL-codes: C72 L13 (search for similar items in EconPapers)
Date: 1999
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Working Paper: Through Trial & Error to Collusion (1998)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:sfb373:199957

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