Journal article


An experiment on supply function competition


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

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.



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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