Price competition under cost uncertainty : A laboratory analysis

  title={Price competition under cost uncertainty : A laboratory analysis},
  author={Klaus Abbink and Jordi Brandts},
We study the relation between the number of firms and price-cost margins under price competition with uncertainty about competitors’ costs. We present results of an experiment in which two, three and four identical firms repeatedly interact in this environment. In line with the theoretical prediction, market prices decrease with the number of firms, but on average stay above marginal costs. Pricing is less aggressive in duopolies than in triopolies and tetrapolies. However, independently from… CONTINUE READING

From This Paper

Figures, tables, and topics from this paper.
11 Citations
23 References
Similar Papers


Publications referenced by this paper.
Showing 1-10 of 23 references

Circle”, BonnEcon Discussion Paper 19/2002

  • D. F. Bonn. Spulber
  • The Journal of Industrial Economics,
  • 1995
Highly Influential
5 Excerpts

The pure theory of monopoly

  • F. Edgeworth
  • In Papers Relating to Political Economy ,
  • 1925
Highly Influential
4 Excerpts

Oligopoly Theory

  • X. Vives
  • Review of Economic Studies,
  • 1999
1 Excerpt

Auctions: An introduction

  • E. Wolfstetter
  • Journal of Economic Surveys,
  • 1997

Similar Papers

Loading similar papers…