Coordination Failure in Capacity-then-Price-Setting Games

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Show simple item record Güth, Werner Stadler, Manfred Zaby, Alexandra 2019-01-14T12:34:01Z 2019-01-14T12:34:01Z 2019-01-14
dc.identifier.other 516190504
dc.identifier.uri de_DE
dc.description.abstract In capacity-then-price-setting games, soft capacity constraints are planned sales amounts where producing above capacity is possible but more costly. While the subgame perfect equilibrium predicts equal prices, experimental evidence often reveals price discrepancies. This failure to coordinate on equal prices can imply losses, especially when serving demand is obligatory. We compare coordination failure with efficient rationing as well as with compulsory serving of demand, and additionally allow for simultaneous and sequential capacity choices. These treatments lead to a varying severity of the threat of losses. Our experimental results show that (possible) coordination failure affects behavior through two channels: via anticipating as well as via reacting to a loss. While capacities increase in anticipation of losses, prices increase when anticipating losses but decrease after experiencing losses. Coordination failures are more probable after subjects experienced a loss. en
dc.language.iso en de_DE
dc.publisher Universität Tübingen de_DE
dc.rights ubt-podno de_DE
dc.rights.uri de_DE
dc.rights.uri en
dc.subject.classification Economics de_DE
dc.subject.ddc 330 de_DE
dc.subject.other capacity-then-price competition en
dc.subject.other loss avoidance en
dc.subject.other path dependence en
dc.subject.other sequentiality of decisions en
dc.subject.other intra-play communication en
dc.title Coordination Failure in Capacity-then-Price-Setting Games en
dc.type Article de_DE
utue.publikation.fachbereich Wirtschaftswissenschaften de_DE
utue.publikation.fakultaet 6 Wirtschafts- und Sozialwissenschaftliche Fakultät de_DE
utue.publikation.source University of Tübingen Working Papers in Economics and Finance ; 116 de_DE


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