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.
Creation-Date: 1991
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