| By: |
Jose Apesteguia (Universitat Pompeu Fabra);
Steffen Huck (University College London, Department of Economics);
Jörg Oechssler (University of Heidelberg, Department of Economics);
Simon Weidenholzer (University of Vienna, Department of Economics) |
| Abstract: |
A well-known result by Vega-Redondo implies that in symmetric Cournot
oligopoly, imitation leads to the Walrasian outcome where price equals
marginal cost. In this paper we show that this result is not robust to the
slightest asymmetry in fixed costs. Instead of obtaining the Walrasian outcome
as unique prediction, every outcome where agents choose identical actions will
be played some fraction of the time in the long run. We then conduct
experiments to check this fragility. We obtain that, contrary to the
theoretical prediction, the Walrasian outcome is still a good predictor of
behavior. |
| Keywords: |
Evolutionary game theory; Stochastic stability; Imita- tion; Cournot markets; Information; Experiments; Simulations |
| JEL: |
C72 C91 C92 D43 L13 |
| Date: |
2007–11 |
| URL: |
http://d.repec.org/n?u=RePEc:awi:wpaper:0461&r=evo |