Collusive signalling in experimental duopoly markets /
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| Other Authors: | , , |
| Format: | Thesis Book |
| Language: | English |
| Published: |
1985.
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| Subjects: | |
| Online Access: | Link to OAKTrust copy |
| Abstract: | The purpose of this dissertation is to characterize the strategic behavior of duopolists, under different conditions of demand, cost and institutional arrangements. The goal of this research is to predict the behavior of duopolists under different market conditions by calculating the costs and benefits of changes in the choice variable: price or quantity. These changes are signals of a firm's intentions. Calculating the cost of sending these signals can indicate the type of market outcome which can be expected in the market. Laboratory experiments, using human subjects, are utilized to test the validity of the behavioral predictions. The model developed in this research represents a duopoly market by means of a payoff table. A payoff table is a matrix of the potential amounts of profit a firm could earn given market parameters and the price/output of the other firm. Then, by calculating the costs and benefits of changing price/output, duopoly behavior can be explained and the market outcome predicted. There are five substantive results of this research. The first is an advancement in experimental economics. Subjects can be made to reveal their expectations of a rival's behavior without it affecting their own behavior. Second, the consistent conjectural equilibrium model is inappropriate to characterize duopoly markets. Third, market participants possess rational conjectures. That is, they use all the available market information when they make their predictions of a rival's behavior. The fourth result is the development of the cost-of-signaling duopoly model. This model can be used to both predict and to explain the behavior of duopolists. The fifth result is the illustration of the role and effect of history in determining a firm's expectation of market outcomes. |
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| Item Description: | Typescript (photocopy). Vita. "Major subject: Economics." |
| Physical Description: | xiii, 186 leaves : illustrations ; 29 cm |
| Bibliography: | Includes bibliographical references (leaves 155-161). |