Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/175585 
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Title: 

Collusion and bargaining in asymmetric cournot duopoly: An experiment

The document was removed on behalf of the author(s)/ the editor(s).

Year of Publication: 
2018
Series/Report no.: 
DICE Discussion Paper No. 283
Publisher: 
Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE), Düsseldorf
Abstract: 
In asymmetric dilemma games without side payments, players face involved cooperation and bargaining problems. The maximization of joint profits is implausible, players disagree on the collusive action, and the outcome is often inefficient. For the example of a Cournot duopoly with asymmetric cost, we investigate experimentally how players cooperate (collude implicitly and explicitly), if at all, in such games. We find that, without communication, players fail to cooperate and essentially play the static Nash equilibrium, confirming previous results. With communication, inefficient firms gain at the expense of efficient ones. When the role of the efficient firm is earned in a contest, the efficient firm earns higher profits than when this role is randomly allocated. Bargaining solutions do not satisfactorily predict collusive outcomes. Finally, when given the choice to talk, the efficient firms often decline that option.
Subjects: 
asymmetries
bargaining
cartels
communication
Cournot
earned role
experiments
JEL: 
C7
C9
L4
L41
ISBN: 
978-3-86304-282-0
Document Type: 
Working Paper

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The document was removed on behalf of the author(s)/ the editor(s) on: November 20, 2018


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