Communication in Cournot competition: An experimental study

•We investigate the impact of communication on Cournot duopoly and triopoly.•As subjects we use both students and managers.•Managers behave in a similar way in two communication conditions but not students.•Managers select lower output than students in one communication condition but not in the othe...

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Bibliographic Details
Published inJournal of economic psychology Vol. 42; pp. 1 - 16
Main Authors Waichman, Israel, Requate, Till, Siang, Ch’ng Kean
Format Journal Article
LanguageEnglish
Published Amsterdam Elsevier B.V 01.06.2014
Elsevier
Elsevier Sequoia S.A
Subjects
Applied psychology
Biological and medical sciences
Cheap talk
Collusion
Communication
Communications systems
Cournot oligopoly
Duopoly
Economic experiment
Economic psychology
Economic theory
Fundamental and applied biological sciences. Psychology
Managers
Miscellaneous
Organizational behavior
Organizational behaviour
Psychology. Psychoanalysis. Psychiatry
Psychology. Psychophysiology
Students
Studies
Subject-pool effects
D43
D21
Cournot oligopoly
Managers
Economic experiment
C93
Subject-pool effects
Cheap talk
L13
C72
Communication
Competition
Human
Experimental economics
Experimental study
Manager
Economic model
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Summary:•We investigate the impact of communication on Cournot duopoly and triopoly.•As subjects we use both students and managers.•Managers behave in a similar way in two communication conditions but not students.•Managers select lower output than students in one communication condition but not in the other.•We observe more collusion in duopoly than in triopoly. This study investigates the impact of communication on outcomes in Cournot duopoly and triopoly experiments. Communication is implemented by two different devices, a ‘standardized-communication’ and a ‘free-communication’ device. Using both students and managers as subjects, we find that managers behave in a similar way under both communication devices, while students collude slightly better under free than under standardized communication. Second, while under standardized communication managers select lower outputs than students, we observe no difference in subject pools under free communication. Finally, we observe more collusion in duopoly than in triopoly.
Bibliography:ObjectType-Article-2
SourceType-Scholarly Journals-1
ObjectType-Feature-1
content type line 23
ISSN:0167-4870
1872-7719
DOI:10.1016/j.joep.2014.02.005