Behavioral heuristics and market patterns in a Bertrand-Edgeworth game
| Autor: | Daniel Heymann, Martin Zimmermann, Roberto P. J. Perazzo, Enrique Kawamura |
|---|---|
| Jazyk: | angličtina |
| Rok vydání: | 2014 |
| Předmět: |
Organizational Behavior and Human Resource Management
Economics and Econometrics Heuristic Aggregate (data warehouse) EXPERIMENTAL TESTING OF HEURISTIC Economía y Negocios OLIGOPOLIES Economía Econometría Oligopoly CIENCIAS SOCIALES Pricing strategies Salient Economics Price dispersion Market price AGENT-BASED MODELS Heuristics Mathematical economics CAPACITY CONSTRAINTS |
| Popis: | This paper studies Bertrand price-setting behavior when firms face capacity constraints (Bertrand–Edgeworth game). This game is known to lack equilibria in pure strategies, while the mixed-strategy equilibria are hard to characterize. We explore families of heuristic rules for individual price-setting behavior and the resulting market patterns, through simulations of agent-based models and laboratory experiments. Overall, the individual pricing strategies observed experimentally can be represented approximately by a sales-based simple rule. In the experiments, average market prices tend to converge from above and approach a state resembling a steady state, with slow aggregate price variations and low price dispersion around an average near the competitive level. However, that configuration can be disturbed occasionally by excursions triggered by discrete price raises of some agents. Salient features of experimental results can be described by simulations where agents use sales-based heuristics with parameters calibrated from the experiments. The results obtained here suggestthe existence of useful complementarities between analytical, experimental and agent-based simulation approaches. Fil: Heymann, Carlos Daniel. Universidad de San Andres; Argentina. Consejo Nacional de Investigaciones Científicas y Técnicas. Oficina de Coordinación Administrativa Saavedra 15. Instituto Interdisciplinario de Economía Política de Buenos Aires; Argentina Fil: Kawamura, Enrique . Universidad de San Andres; Argentina Fil: Perazzo, R.. Universidad de San Andres; Argentina. Instituto Tecnologico de Buenos Aires; Argentina Fil: Zimmermann, Martín . Universidad de San Andres; Argentina |
| Databáze: | OpenAIRE |
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