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. By setting the number of sellers to one,
you can implement a monopoly problem, with optional random demand shocks.
With monopoly, students will discover the optimal output, but relating this
output to notions of marginal revenue and cost is instructive.
| | | | | | With an oligopoly setup, the experiment can be used to motivate
discussion of a Nash/Cournot equilibrium.
There may be tacit collusion with few sellers and fixed matchings,
but competitive pressures tend to be high when there are
three or more sellers in each group. |
Copyright 2009, Charles Holt, Please report problems and suggestions:
veconlab@gmail.com
Vecon Lab - April 21, 2019 |