Published February 1999
| Submitted
Working Paper
Open
Spatial Competition with Three Firms: An Experimental Study
- Creators
- Collins, Richard
- Sherstyuk, Katerina
Chicago
An error occurred while generating the citation.
Abstract
The paper reports the results of an experimental study of the three firm location problem. We compare the subjects' behavior in the experiments with the symmetric mixed strategy Nash equilibrium calculated by Shaked (1982). Overall, the findings are consistent with the equilibrium prediction. However, the subjects' locations were significantly more dispersed than predicted by the theory. Three alternative explanations of this phenomenon - inexperience, approximate equilibrium behavior and risk aversion - are suggested and evaluated for their predictive power. Special attention is paid to risk aversion.
Additional Information
Please direct all correspondence to the second author (Sherstyuk). We are grateful to Peter Bardsley, Kim Border, Colin Camerer, Lisa Cameron, Richard McKelvey, Tom Palfrey, seminar participants at the Australian National University, Melbourne University and Caltech, an anonymous referee and the editor for helpful discussion. We also thank Joe Rasmussen and Andrew Read for their assistance in conducting the experiments. All errors are our own. Published as Collins, R., & Sherstyuk, K. (2000). Spatial competition with three firms: an experimental study. Economic Inquiry, 38(1), 73-94.Attached Files
Submitted - sswp1057.pdf
Files
sswp1057.pdf
Files
(183.9 kB)
| Name | Size | Download all |
|---|---|---|
|
md5:33c7462e80ef977fe46d8892ab35c151
|
183.9 kB | Preview Download |
Additional details
- Eprint ID
- 80264
- Resolver ID
- CaltechAUTHORS:20170810-162532912
- Created
-
2017-08-10Created from EPrint's datestamp field
- Updated
-
2019-10-03Created from EPrint's last_modified field
- Caltech groups
- Social Science Working Papers
- Series Name
- Social Science Working Paper
- Series Volume or Issue Number
- 1057