Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/107446 
Year of Publication: 
2006
Series/Report no.: 
TUC Working Papers in Economics No. 05
Publisher: 
Technische Universität Clausthal, Abteilung für Volkswirtschaftslehre, Clausthal-Zellerfeld
Abstract: 
This paper provides experimental evidence on exit behavior of asymmetrically sized firms in a duopoly with declining demand. We conduct three treatments: (a) The basic model with indivisible real capital. The structure of this treatment represents the main findings of Ghemawat and Nalebuff (1985); (b) an extension of the basic model by introducing a bankruptcy constraint; (c) here we allow for divisible real capital (Ghemawat and Nalebuff (1990)). In all three treatments we find behavior that is, by and large, in line with subgame perfect Nash Equilibrium. However, there is a problem of multiplicity of equilibria in (b) and we find an anchor effect as well as learning effects in (c).
Subjects: 
Exit
duopoly
declining market
experimental economics
JEL: 
D43
L11
C92
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.