TY - JOUR
T1 - Adaptation and convergence of behavior in repeated experimental Cournot games
AU - Rassenti, Stephen
AU - Reynolds, Stanley S.
AU - Smith, Vernon L.
AU - Szidarovszky, Ferenc
N1 - Funding Information:
We thank John Van Huyck for comments on a previous draft. George Vachadze and Eric Von Dohlen provided able assistance with the data analysis. This work was supported, in part, by grant SES-9023055 from the National Science Foundation.
PY - 2000/2
Y1 - 2000/2
N2 - This research examines results from laboratory experiments in which five human subjects participate as sellers in a Cournot oligopoly environment. The central issue is whether repeated play among a group of privately informed subjects will lead to convergence to a unique, static, noncooperative Nash equilibrium. The experiments were designed so that the implications of different hypotheses about adaptation and convergence, such as the best response dynamic and fictitious play, could be distinguished. The results provide, at best, only partial support for the hypothesis that behavior of privately informed subjects will converge to the static Nash equilibrium when play is repeated. Total output averaged over time periods and across experiments is greater than, but still close to, predicted equilibrium total output. However, observed intertemporal variation in total output and heterogeneity in individual choices are inconsistent with convergence to the static Nash equilibrium.
AB - This research examines results from laboratory experiments in which five human subjects participate as sellers in a Cournot oligopoly environment. The central issue is whether repeated play among a group of privately informed subjects will lead to convergence to a unique, static, noncooperative Nash equilibrium. The experiments were designed so that the implications of different hypotheses about adaptation and convergence, such as the best response dynamic and fictitious play, could be distinguished. The results provide, at best, only partial support for the hypothesis that behavior of privately informed subjects will converge to the static Nash equilibrium when play is repeated. Total output averaged over time periods and across experiments is greater than, but still close to, predicted equilibrium total output. However, observed intertemporal variation in total output and heterogeneity in individual choices are inconsistent with convergence to the static Nash equilibrium.
KW - Cournot games
KW - Experimental economics 026
KW - Game theory 215
KW - Industrial organization 610
KW - Learning
KW - Nash equilibrium
KW - Oligopoly
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U2 - 10.1016/s0167-2681(99)00090-6
DO - 10.1016/s0167-2681(99)00090-6
M3 - Article
AN - SCOPUS:0010714610
SN - 0167-2681
VL - 41
SP - 117
EP - 146
JO - Journal of Economic Behavior and Organization
JF - Journal of Economic Behavior and Organization
IS - 2
ER -