Repeated price competition between individuals and between teams

Gary Bornstein; Tamar Kugler; David V. Budescu; Reinhard Selten

doi:10.1016/j.jebo.2006.06.004

Repeated price competition between individuals and between teams

Gary Bornstein, Tamar Kugler, David V. Budescu, Reinhard Selten

Research output: Contribution to journal › Article › peer-review

22 Scopus citations

Abstract

We conducted an experimental study of price competition in a duopolistic market. The market was operationalized as a repeated game between two "teams" with one, two, or three players in each team. We found that asking (and winning) prices were significantly higher in competition between individuals than in competition between two- or three-person teams. There were no general effects of team size, but prices increased with time when each team member was paid his or her own asking price and decreased when the team's profits were divided equally. This result is consistent with a simple model of individual learning.

Original language	English (US)
Pages (from-to)	808-821
Number of pages	14
Journal	Journal of Economic Behavior and Organization
Volume	66
Issue number	3-4
DOIs	https://doi.org/10.1016/j.jebo.2006.06.004
State	Published - Jun 2008

Keywords

Bertrand model
Experiments
Group behavior
Price competition
Tacit collusion

ASJC Scopus subject areas

Economics and Econometrics
Organizational Behavior and Human Resource Management

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10.1016/j.jebo.2006.06.004

Cite this

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abstract = "We conducted an experimental study of price competition in a duopolistic market. The market was operationalized as a repeated game between two {"}teams{"} with one, two, or three players in each team. We found that asking (and winning) prices were significantly higher in competition between individuals than in competition between two- or three-person teams. There were no general effects of team size, but prices increased with time when each team member was paid his or her own asking price and decreased when the team's profits were divided equally. This result is consistent with a simple model of individual learning.",

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AU - Selten, Reinhard

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KW - Price competition

KW - Tacit collusion

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Repeated price competition between individuals and between teams

Abstract

Keywords

ASJC Scopus subject areas

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