Tuesday 5th December at 13:30 in Building D6/Room Bracco,
Cedric Argenton (CentER & TILEC, Tilburg University) will give a seminar on:
Cournot Meets Bayes-Nash: A Discontinuity in Behavior in Finitely Repeated Duopoly Games
Abstract
We conduct a series of Cournot duopoly market experiments with a high number of repetitions and
fixed matching. Our treatments include markets with (a) complete cost symmetry and complete information, (b) slight cost asymmetry and complete information, and (c) varying cost asymmetries and
incomplete information. For the case of complete cost symmetry and complete information, our data
confirm the well-known result that duopoly players achieve, on average, partial collusion. However, as
soon as any level of cost asymmetry or incomplete information is introduced, observed average individual quantities are remarkably close to the static Bayes-Nash equilibrium predictions.