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“A profit table or a profit calculator?” A note on the design of Cournot oligopoly experiments

Published online by Cambridge University Press:  14 March 2025

Till Requate  and
Israel Waichman
Till Requate*
Affiliation:
Department of Economics, University of Kiel, Kiel, Germany
Israel Waichman*
Affiliation:
Department of Economics, University of Kiel, Kiel, Germany
*
e-mail: requate@economics.uni-kiel.de
e-mail: waichman@economics.uni-kiel.de
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Abstract

We report on an experiment conducted to evaluate the effects of varying the way in which market information is presented to participants in laboratory Cournot duopolies. We find that the most standard variations, which are the use of a profit table or a profit calculator, yield indistinguishable performance. However, the addition of a best-response option to the profit calculator tends to increase aggregate output to the Cournot level and decrease the incidence of tacit collusion.

Keywords

Cournot oligopolyLaboratory experimentProfit tableProfit calculatorBest-response calculator

JEL classification

D21: Firm Behavior: Theory C92: Laboratory, Group Behavior L13: Oligopoly and Other Imperfect Markets C72: Noncooperative Games
Type
Research Article
Information
Experimental Economics , Volume 14 , Issue 1 , March 2011 , pp. 36 - 46
Copyright
Copyright © Economic Science Association 2010

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Footnotes

Electronic supplementary material The online version of this article (doi: 10.1007/s10683-010-9256-2) contains supplementary material, which is available to authorized users.

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