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Experimental Cournot oligopoly and inequity aversion

İriş, Doruk ; Santos-Pinto, Luís

In: Theory and Decision, 2014, vol. 76, no. 1, p. 31-45

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    Titre
    • Experimental Cournot oligopoly and inequity aversion
    Auteur
    • İriş, Doruk. Sogang University, Seoul, South Korea
    • Santos-Pinto, Luís. Faculty of Business and Economics, University of Lausanne, Internef 535, 1015, Lausanne, Switzerland
    Type de document
    • Postprint
    Langue
    • Anglais
    Publié dans
    • Theory and Decision, 2014, vol. 76, no. 1, p. 31-45. Springer US; http://www.springer-ny.com
    Autre version électronique
    Identifiant OAI-PMH
    • oai:doc.rero.ch:325825
    Summary
    This paper explores the role of inequity aversion as an explanation for observed behavior in experimental Cournot oligopolies. We show that inequity aversion can change the nature of the strategic interaction: quantities are strategic substitutes for sufficiently asymmetric output levels but strategic complements otherwise. We find that inequity aversion can explain why: (i) some experiments result in higher than Cournot-Nash production levels while others result in lower, (ii) collusion often occurs with only two players whereas with three or more players market outcomes are very close to Cournot-Nash, and (iii) players often achieve equal profits in asymmetric Cournot oligopoly.