Allowing for Two Production Periods in the Cournot Duopoly: Experimental Evidence
CentER Discussion Paper No. 2003-42
Posted: 8 Jun 2004
Date Written: 2003
In this study behavior in a Cournot duopoly with two production periods (the market clears only after the second period) is compared to behavior in a standard one-period Cournot duopoly. Theory predicts the endogenous emergence of a Stackelberg outcome in the two-period market. The results of the experiments, however, reveal that in both markets (roughly) symmetric outcomes emerge and that, after a short adaption phase, average industry output in the two-period markets is the same as in the standard one-period markets.
Keywords: Cournot duopoly, Stackelberg, flexibility, experiments
JEL Classification: C72, C91
Suggested Citation: Suggested Citation