Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/184869
Authors: 
Fischer, Christian
Normann, Hans-Theo
Year of Publication: 
2018
Series/Report no.: 
DICE Discussion Paper 283
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. In our treatments without communication, players fail to cooperate and essentially play the static Nash equilibrium (consistent with 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 outcomes.
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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