Oligopoly Competition in Continuous Time

36 Pages Posted: 22 Sep 2015 Last revised: 29 Oct 2016

See all articles by Niklas Horstmann

Niklas Horstmann

Karlsruhe Institute of Technology

Jan Kraemer

University of Passau

Daniel Schnurr

University of Passau

Date Written: August 22, 2016


We conduct oligopoly competition experiments with differentiated goods in discrete and continuous time. Continuous time experiments allow for real-time, asynchronous strategic interaction and are therefore argued to be a more realistic mode of interaction, particularly in the context of (electronic) markets. We consider duopolies and triopolies both under Bertrand as well as Cournot competition and consistently find that, ceteris paribus, tacit collusion is higher under discrete time than under continuous time, which contrasts the theoretical prediction. Thus, our results bear important methodological implications for research on oligopoly competition.

Keywords: oligopoly competition, experiment, continuous time, discrete time, tacit collusion

JEL Classification: C90, C92, D43, L13

Suggested Citation

Horstmann, Niklas and Kraemer, Jan and Schnurr, Daniel, Oligopoly Competition in Continuous Time (August 22, 2016). Available at SSRN: https://ssrn.com/abstract=2630664 or http://dx.doi.org/10.2139/ssrn.2630664

Niklas Horstmann

Karlsruhe Institute of Technology ( email )

Institute of Information Systems and Marketing
Fritz-Erler-Str. 23
Karlsruhe, 76133
+49 721 608-48378 (Phone)
+49 721 608-48399 (Fax)

HOME PAGE: http://iism.kit.edu/im/horstmann

Jan Kraemer

University of Passau ( email )

Chair of Internet and Telecommunications Business
Dr.-Hans-Kapfinger-Str. 12
Passau, D-94036
+498515092580 (Phone)
+498525092582 (Fax)

HOME PAGE: http://www.kraemer.biz

Daniel Schnurr (Contact Author)

University of Passau ( email )

Dr.-Hans-Kapfinger-Str. 12
Passau, 94032

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