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


Publisher: Elsevier

Book Volume: 63

Pages Range: 170-185

DOI: 10.1016/j.euroecorev.2013.06.006


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.

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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.

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