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NASH EQUILIBRIUM AND BUYER RATIONING RULES: EXPERIMENTAL EVIDENCE
Author(s) -
KRUSE JAMIE BROWN
Publication year - 1993
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/j.1465-7295.1993.tb00895.x
Subject(s) - rationing , economics , duopoly , mathematical economics , nash equilibrium , outcome (game theory) , microeconomics , queue , epsilon equilibrium , market power , best response , computer science , cournot competition , health care , programming language , economic growth , monopoly
Laboratory experiments compare the results of two different buyer rationing rules on Bertrand‐Edgeworth duopoly markets. The two rationing rules, a value queue and a random queue, specify the ordering of buyers and generate different predictions under otherwise identical conditions. These experiments show market outcome can chane significantly with a change in the ordering of buyers. The direction of these changes agrees with the predictions of the stage‐game Nash equilibrium. Thus, the single‐shot Nash equilibrium is show to have predictive power even in repeated games.