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- Title
EFFECTS OF THE THREAT OF LOSSES ON DUOPOLY BARGAINING.
- Authors
Murphy, James L.
- Abstract
This article examines the effect of the threat of losses on duopoly bargaining. This paper is an extension of the recent work of Siegel and Fouraker in experimental oligopoly behavior. The only basic difference between this experiment and that of Fouraker and Siegel is in the parameters underlying the construction of the profit table. The new profit table is extended to allow a wider range of price bids. Thirty-six subjects were used in the experiment. The experiment was designed to replicate the incomplete information Fouraker-Siegel experiment. The results of the experiment showed that it is quite possible that some of the pairs who arrived at an equilibrium at the 0.5 competitive solution in the F-S experiments did so only because it was the lowest possible price. Next, a greater latitude of equilibrium ruling prices was found. Finally, the experiment supports the interpretation of end play behavior given by Fouraker and Siegel.
- Subjects
BUSINESS losses; DUOPOLIES; IMPERFECT competition; EXPERIMENTAL design; BID price; PROFIT; PRICES; STANDARD deviations
- Publication
Quarterly Journal of Economics, 1966, Vol 80, Issue 2, p296
- ISSN
0033-5533
- Publication type
Article
- DOI
10.2307/1880694