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Spatial competition with three firms: an experimental study

Collins, Richard and Sherstyuk, Katerina (2000) Spatial competition with three firms: an experimental study. Economic Inquiry, 38 (1). pp. 73-94. ISSN 0095-2583. doi:10.1111/j.1465-7295.2000.tb00005.x.

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This article 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. 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

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Additional Information:© 2000 Wiley. We are grateful to Peter Bardsley, Kim Border, Colin Camerer, Lisa Cameron Charles Hyde 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.
Issue or Number:1
Classification Code:JEL: C9, C72, D43
Record Number:CaltechAUTHORS:20170824-104826903
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Official Citation:Collins, R. and Sherstyuk, K. (2000), Spatial competition with three firms: an experimental study. Economic Inquiry, 38: 73–94. doi: 10.1111/j.1465-7295.2000.tb00005.x
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:80768
Deposited By: Ruth Sustaita
Deposited On:28 Aug 2017 22:47
Last Modified:15 Nov 2021 19:38

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