An experiment on supply function competition

Bolle F, Grimm V, Ockenfels A, del Pozo X (2013)

Publication Language: English

Publication Type: Journal article

Publication year: 2013

Journal

European Economic Review Elsevier

Publisher: Elsevier

Book Volume: 63

Pages Range: 170-185

DOI: 10.1016/j.euroecorev.2013.06.006

Abstract

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.

Authors with CRIS profile

Veronika Grimm Lehrstuhl für Volkswirtschaftslehre, insbesondere Wirtschaftstheorie

Related research project(s)

EnCN 2 - Wasserstoffspeicherung Energie Campus 2 (EnCN 2) - Speicher, Projektteil B - Speicher mit Marktreife bis 2022 Jan. 1, 2017 - Dec. 31, 2021

How to cite

APA:

Bolle, F., Grimm, V., Ockenfels, A., & del Pozo, X. (2013). An experiment on supply function competition. European Economic Review, 63, 170-185. https://dx.doi.org/10.1016/j.euroecorev.2013.06.006

MLA:

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

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