Advance production and Cournot outcomes: an experimental investigation

Authors
Citation
Dd. Davis, Advance production and Cournot outcomes: an experimental investigation, J ECON BEH, 40(1), 1999, pp. 59-79
Citations number
28
Language
INGLESE
art.tipo
Article
Categorie Soggetti
Economics
Journal title
JOURNAL OF ECONOMIC BEHAVIOR & ORGANIZATION
ISSN journal
0167-2681 → ACNP
Volume
40
Issue
1
Year of publication
1999
Pages
59 - 79
Database
ISI
SICI code
0167-2681(199909)40:1<59:APACOA>2.0.ZU;2-T
Abstract
An experiment designed to assess the effects of advance-production decision s on posted-offer market performance is reported. Six of the twelve triopol ies were conducted under standard posted-offer rules. In the remaining mark ets sellers made binding production commitments prior to posting prices, an alteration that shifts the unique stage-game Nash equilibrium from the com petitive to the Cournot outcome. As predicted, advance-production decisions raised prices and lowered output. Nevertheless, stable Cournot outcomes we re never observed. (C) 1999 Elsevier Science B.V. All rights reserved. JEL classification: L1; C9.