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Hotelling revisits the lab: equilibration in continuous and discrete time

Published online by Cambridge University Press:  01 January 2025

Curtis Kephart  and
Daniel Friedman
Curtis Kephart*
Affiliation:
Economics Department, University of California, Santa Cruz, 1156 High Street, Santa Cruz, CA 95064, USA
Daniel Friedman*
Affiliation:
Economics Department, University of California, Santa Cruz, 1156 High Street, Santa Cruz, CA 95064, USA
*
e-mail: curtiskephart@gmail.com
dan@ucsc.edu
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Abstract

We investigate experimentally the impact of continuous time on a four-player Hotelling location game. The static pure strategy Nash equilibrium (NE) consists of firms paired-up at the first and third quartiles of the linear city. In a repeated simultaneous move (discrete time) treatment, we largely replicate previous findings in which subjects fail to converge to the NE. However, in asynchronous move (continuous time) treatments we see clear convergence towards the NE.

Keywords

Hotelling modelLaboratory experimentAsynchronous move

JEL classification

D21: Firm Behavior: Theory D43: Oligopoly and Other Forms of Market Imperfection C92: Laboratory, Group Behavior C73: Stochastic and Dynamic Games • Evolutionary Games • Repeated Games
Type
Original Paper
Information
Journal of the Economic Science Association , Volume 1 , Issue 2 , December 2015 , pp. 132 - 145
Copyright
Copyright © Economic Science Association 2015

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Footnotes

Electronic supplementary material The online version of this article (doi:10.1007/s40881-015-0009-z) contains supplementary material, which is available to authorized users.

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