A potential source of instability of many economic models is that agents have little incentive to stick with the equilibrium. We show experimentally that this may matter with price competition. The control variable is a price floor, which increases the cost of deviating from equilibrium....

We investigate asymmetric price transmission (APT) in laboratory experiments and find that imperfect tacit collusion is likely the cause in our otherwise frictionless markets. We vary the number of sellers across markets to evaluate the role competition plays in APT. We report similar magnitudes...

We investigate the quality provision behavior and its implications for the occurrence of collusion in competitive health care markets where providers are assumed to be altruistic towards patients. For this, we employ a laboratory experiment with a health care market framing where subjects decide...

We investigate the quality provision behavior and its implications for the occurrence of collusion in competitive health care markets where providers are assumed to be altruistic towards patients. For this, we employ a laboratory experiment with a health care market framing where subjects decide...

In the context of supply function competition with private information, we test in the laboratory whether - as predicted in Bayesian equilibrium - costs that are positively correlated lead to steeper supply functions and less competitive outcomes than do uncorrelated costs. We find that the...

Industrial organization is mainly concerned with the behavior of large firms, especially when it comes to oligopoly theory. Experimental industrial organization therefore faces a problem: How can firms be brought into the laboratory? The main approach relies on framing: Call individuals "firms"!...

Industrial organization is mainly concerned with the behavior of large firms. Experimental industrial organization therefore faces a problem: How can firms be brought into the laboratory? The main approach relies on framing: Call individuals "firms"! This experimental approach is not in line...

Industrial organization is mainly concerned with the behavior of large firms, especially when it comes to oligopoly theory. Experimental industrial organization, therefore, faces a problem: How can firms be brought into the laboratory? The main approach relies on framing: Call individuals...

A well-known result by Vega-Redondo implies that in symmetric Cournot oligopoly, imitation leads to the Walrasian outcome where price equals marginal cost. In this paper we show that this result is not robust to the slightest asymmetry in fixed costs. Instead of obtaining the Walrasian outcome...

Internet experiments are a new and convenient way for reaching a large subject pool. Yet, providing incentives to subjects can be a tricky design issue. One cost effective and simple method is the publication of a high score (as in computer games). We test whether a high score provides adequate...