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Imitation and the Evolution of Walrasian Behavior: Theoretically Fragile but Behaviorally Robust

Apesteguia, Jose and Huck, Steffen and Oechssler, Jörg and Weidenholzer, Simon (2007) Imitation and the Evolution of Walrasian Behavior: Theoretically Fragile but Behaviorally Robust. [UNSPECIFIED]

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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.

Item Type: UNSPECIFIED
Additional Information: Financial support from the Deutsche Forschungsgemeinschaft, SFB 504, at the University of Mannheim, is gratefully acknowledged.
Subjects: H Social Sciences > HB Economic Theory
Divisions: Faculty of Social Sciences > Economics, Department of
Depositing User: Jim Jamieson
Date Deposited: 27 Jun 2012 15:10
Last Modified: 17 Aug 2017 18:12
URI: http://repository.essex.ac.uk/id/eprint/2640

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