Wednesday, June 9, 2010
Posted by D. Daniel Sokol
Özgür Gürerka (University of Erfurt) and Reinhard Selten (University of Bonn) explain The Effect of Payoff Tables on Experimental Oligopoly Behavior.
ABSTRACT: We explore the effects of the provision of an information-processing instrument - payoff tables - on behavior in experimental oligopolies. In one experimental setting, subjects have access to payoff tables whereas in the other setting they have not. It turns out that this minor variation in presentation has non-negligible effects on participants' behavior, particularly in the initial phase of the experiment. In the presence of payoff tables, subjects tend to be more cooperative. As a consequence, collusive behavior is more likely and quickly to occur.