Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/73094
Authors: 
Hildenbrand, Andreas
Year of Publication: 
2012
Series/Report no.: 
Joint Discussion Paper Series in Economics 29-2012
Abstract: 
Industrial organization is mainly concerned with the behavior of large firms. Experimental industrial organization therefore faces a problem: How can firms be brought into the laboratory? The main approach relies on framing: Call individuals firms! This experimental approach is not in line with modern industrial organization, according to which a firm's market behavior is also determined by its organizational structure. In this paper, a Stackelberg experiment is considered in order to answer the question whether framing individual decision making as organizational decision making or implementing an organizational structure is more effective in generating profit-maximizing behavior. Firms are either represented by individuals or by teams. I find that teams' quantity choices are more in line with the assumption of profit maximization than individuals' choices. Compared to individuals, teams appear to be less inequality averse.
Subjects: 
industrial organization
Stackelberg game
individual behavior
team behavior
framing
experimental economics
JEL: 
C72
C91
C92
D43
L130
Document Type: 
Working Paper

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