Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/78408
Authors: 
Huck, Steffen
Normann, Hans-Theo
Oechssler, Jörg
Year of Publication: 
2002
Series/Report no.: 
Bonn Econ Discussion Papers 1/2002
Abstract: 
We report results of experiments designed to test the predictions of the best reply process. In a Cournot oligopoly with four firms, the best reply process should theoretically explode if demand and cost functions are linear. We find, however, no experimental evidence of such instability. Moreover, we find no differences between a market which theoretically should not converge to Nash equilibrium and one which should converge because of inertia. We investigate the power of several learning dynamics to explain this unpredicted stability.
Subjects: 
best reply process
Cournot oligopoly
learning experiments
imitation
JEL: 
C72
C92
L13
Document Type: 
Working Paper

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