PQ strategies in monopolistic competition: Some insights from the lab

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractWe present results from 50-rounds experimental markets in which firms decide repeatedly both on price and quantity of a perishable good. The experiment is designed to study the price-quantity setting behavior of subjects acting as firms in monopolistic competition. In the implemented treatments subjects are asked to make both production and pricing decisions given different information sets. We investigate how subjects decide on prices and quantities in response to signals from the firms' internal conditions, i.e., individual profits, excess demand, and excess supply, and the market environment, i.e., aggregate price level. We find persistent heterogeneity in individual behavior, with about 46% of market followers, 28% profit-adjusters and 26% demand adjusters. Nevertheless, prices and quantities tend to converge to the monopolistically competitive equilibrium and that subjects' behavior is well described by learning heuristics.JEL codes: TBD

Economic crisis and fiscal federalism in Italy

“…Furthermore, since 2002, different rules have been introduced for regions and the other local governments (provinces and municipalities) 11 .…”

How limiting deceptive practices harms consumers

“…In fact, I can't tell who picked the wrong price and I shall think that they are equally likely to sell a high-quality good!". 11 Thus, it is easy to show that, under A3a, there exists a unique pooling equilibrium, p * = f . Of course, equilibria with price lower than f do not exist as they violate the participation constraint of the low-quality seller.…”

“Survival Value and a Robust, Practical, Joyless Individualism”: Thomas Nixon Carver, Social Justice, and Eugenics

“…(1904,171) 11 Such a battle of the standards would also have social consequences. In Carver's view, if the nation finds itself invaded by a flood of immigrants "belonging to races or nationalities which do not fuse with the rest of the population by free intermarriage," three possible scenarios may emerge: a) "Geographical separation of races;" b) "Social separation of races, i.e., in the formation of classes or castes, one race or the other becoming subordinate;" c) "Continual race antagonism, frequently breaking out into race war" (1911, 206; 1915a, 370).…”

“…Carver suggested a plan of restriction that would admit only those foreign-born laborers who "could present contracts, signed by responsible employers, guaranteeing employment at two dollars a day for at least a year" (372). This would stop the influx of "cheap laborers whose influence is to depress the wages of unskilled labor," and would also eventually "make two dollars a day the actual 11 Differently from some of his Progressive colleagues, Carver was careful enough to specify that "not every people with a low standard of living has high competing power." As he further explained: "The Mexican peons have as cheap a standard of living as the Chinese coolies, and yet they do not compete successfully even with Americans, who have a higher standard of living.…”