Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/26269
Authors: 
Apesteguia, José
Huck, Steffen
Oechssler, Jörg
Weidenholzer, Simon
Year of Publication: 
2008
Series/Report no.: 
CESifo working paper 2224
Abstract: 
A well-known result by Vega-Redondo (1997) implies that in symmetric Cournot oligopoly, imitation leads to the Walrasian outcome where price equals marginal cost. In this paper, we show that this result is not robust to the slightest asymmetry in fixed costs. Instead of obtaining the Walrasian outcome as unique prediction, every outcome where agents choose identical actions will be played some fraction of the time in the long run. We then conduct experiments to check this fragility. We obtain that, contrary to the theoretical prediction, the Walrasian outcome is still a good predictor of behavior.
Subjects: 
evolutionary game theory
stochastic stability
imitation
Cournot markets
information
experiments
simulations
JEL: 
C72
C91
C92
D43
L13
Document Type: 
Working Paper

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