Making Sense of the Experimental Evidence on Endogenous Timing in Duopoly Markets

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Type
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Publications
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Title
Making Sense of the Experimental Evidence on Endogenous Timing in Duopoly Markets
Journal
Journal of Economic Behavior and Organization
Author(s)
Santos Pinto L.
ISSN
0167-2681
Publication state
Published
Issued date
12/2008
Peer-reviewed
Oui
Volume
68
Number
3-4
Pages
657-666
Language
english
Abstract
The prediction of asymmetric equilibria with Stackelberg outcomes is clearly the most frequent result in the endogenous timing literature. Several experiments have tried to validate this prediction empirically, but failed to find support for it. In contrast, these experiments find that simultaneous-move outcomes are modal and that behavior in endogenous timing games is quite heterogeneous. This paper generalizes Hamilton and Slutsky's (Hamilton, J., Slutsky, S., 1990. Endogenous timing in duopoly games: Stackelberg or Cournot equilibria. Games and Economic Behavior 2, 29-46) endogenous timing games by assuming that players are averse to inequality in payoffs. I explore the theoretical implications of inequity aversion and compare them to the empirical evidence. I find that this explanation is able to organize most of the experimental evidence on endogenous timing games. However, inequity aversion is not able to explain delay in Hamilton and Slutsky's endogenous timing games.
Keywords
Endogenous timing, Cournot, Stackelberg, Inequity aversion
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Create date
01/12/2008 21:32
Last modification date
20/08/2019 15:08
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