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From imitation to collusion: a replication

Published online by Cambridge University Press:  01 January 2025

Jörg Oechssler ,
Alex Roomets  and
Stefan Roth
Jörg Oechssler*
Affiliation:
Department of Economics, University of Heidelberg, Bergheimer Str.58, 69115 Heidelberg, Germany
Alex Roomets*
Affiliation:
Franklin and Marshall College, Lancaster, PA, USA
Stefan Roth*
Affiliation:
Universitat Pompeu Fabra, Barcelona, Spain
*
e-mail: oechssler@uni-hd.de
roomets@gmail.com
stefan.roth@upf.edu
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Abstract

In oligopoly, imitating the most successful competitor yields very competitive outcomes. This theoretical prediction has been confirmed experimentally by a number of studies. A recent paper by Friedman et al. (J Econ Theory 155:185–205, 2015) qualifies those results in an interesting way: While they replicate the very competitive results for the first 25–50 periods, they show that when using a much longer time horizon of 1200 periods, results slowly turn to more and more collusive outcomes. We replicate their result for duopolies. However, with 4 firms, none of our oligopolies becomes permanently collusive. Instead, the average quantity always stays above the Cournot–Nash equilibrium quantity. Thus, it seems that “four remain many” even with 1200 periods.

Keywords

ImitationExperimentCournot oligopolyWalrasian outcome

JEL classification

D74: Conflict • Conflict Resolution • Alliances • Revolutions C91: Laboratory, Individual Behavior C72: Noncooperative Games
Type
Replication Paper
Information
Journal of the Economic Science Association , Volume 2 , Issue 1 , May 2016 , pp. 13 - 21
Copyright
Copyright © Economic Science Association 2016

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Footnotes

Electronic supplementary material The online version of this article (doi:10.1007/s40881-015-0019-x) contains supplementary material, which is available to authorized users.

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