Learning in Cournot Oligopoly: An Experiment

38 Pages Posted: 25 Dec 1997

See all articles by Steffen Huck

Steffen Huck

University College London - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute); IZA Institute of Labor Economics

Hans-Theo Normann

Heinrich Heine University Dusseldorf - Department of Economics; Max Planck Institute for Research on Collective Goods

Joerg Oechssler

University of Heidelberg - Alfred Weber Institute for Economics

Date Written: September 1997

Abstract

This experiment was designed to test various learning theories in the context of a Cournot oligopoly. We derive theoretical predictions for the learning theories and test these predictions by varying the information given to subjects. The results show that some subjects imitate successful behavior if they have the necessary information; and if they imitate, markets are more competitive. Other subjects follow a best reply process. On the aggregate level we find that more information about demand and cost conditions yields less competitive behavior, while more information about the quantities and profits of other firms yields more competitive behavior.

JEL Classification: L13

Suggested Citation

Huck, Steffen and Normann, Hans-Theo and Oechssler, Joerg, Learning in Cournot Oligopoly: An Experiment (September 1997). Available at SSRN: https://ssrn.com/abstract=41214 or http://dx.doi.org/10.2139/ssrn.41214

Steffen Huck

University College London - Department of Economics ( email )

Gower Street
London WC1E 6BT, WC1E 6BT
United Kingdom
+44 207 679 5895 (Phone)
+44 207 916 2774 (Fax)

HOME PAGE: http://www.ucl.ac.uk/~uctpshu/

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Hans-Theo Normann

Heinrich Heine University Dusseldorf - Department of Economics ( email )

Duesseldorf
Germany

Max Planck Institute for Research on Collective Goods ( email )

Kurt-Schumacher-Str. 10
D-53113 Bonn, 53113
Germany

Joerg Oechssler (Contact Author)

University of Heidelberg - Alfred Weber Institute for Economics ( email )

Grabengasse 14
Heidelberg, D-69117
Germany
+49 6221 54 3548 (Phone)
+49 6221 54 3630 (Fax)

HOME PAGE: http://www.awi.uni-heidelberg.de/with2/theorie2/Team/Oechssler/Oechssler_main.html

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