Overview: This program sets up one or more markets in which each person is a seller who chooses a production quantity. This is a Cournot game with linear demand and constant marginal cost. The game can be used to motivate discussion of the Nash/Cournot predictions. There may be tacit collusion with few sellers and fixed matchings, and there may be severe competitive pressures when there are several sellers.

Group Size, Matching, and Rounds: During setup, you select the range of feasible outputs, the marginal cost, and the demand function intercept and slope parameters. The total number of participants in the session is divided up into groups of a size that you specify, and each group represents a separate market. A monopoly experiment can be run by setting the group size to 1. Grouping may be fixed (same in all periods) or randomly reconfigured after each round. You also have the option of switching to a new set of payoff parameters after a specified number of rounds, so that a cohort of participants goes through two treatments. The instructions are automatically configured to conform to the parameters you select, and your instructor results page calculates data averages by round and by treatment. The best way to become acquainted with the various features of this program is to test it (see instructions on the next page).

Discussion: The discussion can focus on the Nash/Cournot equilibrium and on the extent to which quantity competition drives prices to marginal-cost levels. Some tacit collusion may be observed with small numbers and repeated matchings.

Session Name: This is one of the Veconlab web-based experiment programs, and to use them you will need your personal "session name." If you do not already have one, it can be obtained quickly online from the Guide to Experimenters link on: