Friedman, Daniel and Huck, Steffen and Oprea, Ryan and Weidenholzer, Simon (2015) From imitation to collusion: Long-run learning in a low-information environment. Journal of Economic Theory, 155 (C). pp. 185-205. DOI https://doi.org/10.1016/j.jet.2014.10.006
Friedman, Daniel and Huck, Steffen and Oprea, Ryan and Weidenholzer, Simon (2015) From imitation to collusion: Long-run learning in a low-information environment. Journal of Economic Theory, 155 (C). pp. 185-205. DOI https://doi.org/10.1016/j.jet.2014.10.006
Friedman, Daniel and Huck, Steffen and Oprea, Ryan and Weidenholzer, Simon (2015) From imitation to collusion: Long-run learning in a low-information environment. Journal of Economic Theory, 155 (C). pp. 185-205. DOI https://doi.org/10.1016/j.jet.2014.10.006
Abstract
We explore the stability of imitation in a 1200-period experimental Cournot game where subjects do not know the payoff function but see the output quantities and payoffs of each oligopolist after every period. In line with theoretical predictions and previous experimental findings, our oligopolies reach highly competitive levels within 50 periods. However, already after 100 periods, quantities start to drop and eventually fall deep into collusive territory without pausing at the Nash equilibrium. Our results demonstrate how groups of subjects can learn their way out of dysfunctional heuristics, and suggest elements for a new theory of how cooperation emerges.
Item Type: | Article |
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Uncontrolled Keywords: | Cournot oligopoly; Imitation; Learning dynamics; Cooperation |
Subjects: | H Social Sciences > HB Economic Theory |
Divisions: | Faculty of Social Sciences Faculty of Social Sciences > Economics, Department of |
SWORD Depositor: | Unnamed user with email elements@essex.ac.uk |
Depositing User: | Unnamed user with email elements@essex.ac.uk |
Date Deposited: | 16 Apr 2015 14:24 |
Last Modified: | 30 Oct 2024 20:23 |
URI: | http://repository.essex.ac.uk/id/eprint/13573 |