SFB 303 Discussion Paper No. B - 197
Author: Keser, Claudia
Title: International Duopoly Experiments And Simulations Computer Tournaments with Strategies for a Duopoly
Game with Demand Inertia
Abstract: This paper presents the results of International Duopoly Experiments And Simulation (IDEAS), an
experimental research project. These experiments study a duopoly game with demand inertia. The game is one of
a multistage duopoly where the decision variables are prices in each period. Sales depend on current prices and
also on past sales (demand inertia). Participants in these experiments, academic economists, developed a strategy
for each a low cost and a high cost situation of the game. In a computer simulation, each participant's strategies
interacted with all other participants' strategies for the respective opposite cost situation. The participants had
been informed that the criterion for ranking performance of strategies was profit on average over all plays and
that the rankings would be published. After a first computer simulation, the participants could submit revised
strategies for participation in a second computer simulation.
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