An experiment on supply function competition

Journal article

Publication Details

Author(s): Bolle F, Grimm V, Ockenfels A, del Pozo X
Journal: European Economic Review
Publisher: Elsevier
Publication year: 2013
Volume: 63
Pages range: 170-185
ISSN: 0014-2921
Language: English


We experimentally investigate key predictions of supply function equilibrium. While, overall, equilibrium organizes bidding behavior well, we observe three important deviations. First, bidding is sensitive to theoretically irrelevant changes of the demand distribution. Second, in a market with symmetric firms we observe tacit collusion in that firms provide less than the predicted quantities. Third, in a market with asymmetric capacities, the larger firm bids more competitively than predicted, while the smaller firms still provide less than equilibrium quantities.

FAU Authors / FAU Editors

Grimm, Veronika Prof. Dr.
Lehrstuhl für Volkswirtschaftslehre, insbesondere Wirtschaftstheorie

How to cite

Bolle, F., Grimm, V., Ockenfels, A., & del Pozo, X. (2013). An experiment on supply function competition. European Economic Review, 63, 170-185.

Bolle, Friedel, et al. "An experiment on supply function competition." European Economic Review 63 (2013): 170-185.


Last updated on 2018-25-07 at 10:10