Monday, September 13, 2010
Posted by D. Daniel Sokol
Andreas Hildenbrand (Giessen - Econ) discusses Cournot or Stackelberg competition? A survey on experimental evidence.
ABSTRACT: In this survey, I look into experimental studies on duopolistic quantity competition with homogeneous products and duopolistic price competition with heterogeneous products. The focus is on the sequence of competition. That is, I summarize and analyze experimental studies checking Cournot competition against Stackelberg competition. I find that while Stackelberg equilibrium outcomes are seldom under quantity competition, under price competition, the Stackelberg equilibrium prediction seems to be more appropriate. However, after discussing the experimental setups, I conclude that some methodological problems are present. Moreover, I make recommendations for further research.