Experimental duopoly markets with demand inertia. Game-playing experiments and the strategy method (Q1310802)

The central purpose of this book is to analyze the behavior of boundedly rational individuals in a dynamic duopoly situation with demand inertia. To do this, on the one hand a series of game-playing experiments via computer among individuals (who were broadly instructed about the game) has been conducted, and on the other hand Selten's (1967) strategy method was used whereby experienced players in a specific game were allowed to design strategies for this game in flow-chart-form. The latter approach makes the strategies of the players directly visible whereas traditional game-playing experiments cannot fully reveal the players' strategy which can only indirectly be conferred from actual behavior. The results of both the game-playing experiments and the strategy tournaments are presented and discussed whereby special emphasis is given to the analysis of the findings from the strategy approach. After this, both types of results are compared; in this context, the players' behavior in the experimental approach does not seem as systematic as the strategy behavior. However, this gap seems to narrow down if some experience in spontaneous playing of the given games is gained by the individuals involved. Finally, the author compares her findings with related studies by Selten (1967), Axelrod (1984), and Selten, Mitzkewitz and Uhlich (1988).