123 research outputs found
Non-competitive markets
Among all the paradigms in economic theory, the theoretical predictions of oligopoly were the first to be examined in the laboratory. In this chapter, instead of surveying all the experiments with few sellers, we adopt a narrower definition of the term âoligopolyâ, and focus on the experiments that were directly inspired by the basic oligopolistic models of Cournot, Bertrand, Hotelling, Stackelberg, and some extensions. Most of the experiments we consider in this chapter have been run in the last three decades. This literature can be considered as a new wave of experimental works aiming at representing basic oligopolistic markets and testing their properties. The chapter is divided into independent sections referring to different parts of the oligopolistic theory, including both monopoly as well as a number of extensions of the basic models, which have been chosen with the aim of providing a representative list of the relevant experimental findings
Risk Aversion, Over-Confidence and Private Information as determinants of Majority Thresholds
The Price for Information about Probabilities and its Relation with Capacities
In this paper ambiguity aversion is measured through the maximum price the decision maker is willing to pay in order to know the probability of an event. Two comparative problems are examined in which the decision maker faces an act: in one case buying
information implies playing a lottery, while in the other case buying information gives also the option to avoid playing the lottery. In both decision settings, relying on Choquet expected utility model, we study how the decision makerâs risk and ambiguity attitudes affect the reservation price for information. These effects are analyzed for different levels of ambiguity of the act
An Experiment on Prisonerâs Dilemma with Confirmed Proposals
We apply an alternating proposals protocol with a confirmation stage as a way of solving a Prisonerâs Dilemma game. We interpret playersâ proposals and (no) confirmation of outcomes of the game as a tacit communication device. The protocol leads to unprecedented high levels of cooperation in the laboratory. Assigning the power of confirmation to one of the two players alone, rather than alternating the role of a leader significantly increases the probability of signing a cooperative agreement in the first bargaining period. We interpret pre-agreement strategies as tacit messages on playersâ willingness to cooperate and on their beliefs about the othersâ type.Prisonerâs Dilemma; Bargaining; Confirmed Proposals; Confirmed Agreement; Tacit Communication.
The Price for Information about Probabilities and its Relation with Capacities
In this paper ambiguity aversion is measured through the maximum price the decision maker is willing to pay in order to know the probability of an event. Two comparative problems are examined in which the decision maker faces an act: in one case buying
information implies playing a lottery, while in the other case buying information gives also the option to avoid playing the lottery. In both decision settings, relying on Choquet expected utility model, we study how the decision makerâs risk and ambiguity attitudes affect the reservation price for information. These effects are analyzed for different levels of ambiguity of the act
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