Non-competitive markets

Among all the paradigms in economic theory, the theoretical predictions of oligopoly were the first to be examined in the laboratory. In the origins of experimental economics one can find the works of Chamberlin (1948) and of Smith (1962, 1964), who designed experiments to study a market with few agents that could reach the competitive equilibrium. In this chapter, instead of surveying all experiments with few sellers, we adopt a narrower definition of the term “oligopoly,” and focus on experiments that were directly inspired by the basic oligopolistic models of Cournot (1838), Bertrand (1883), Hotelling (1929), von Stackelberg (1934), and similar. We omit, therefore, other experiments, such as those of Chamberlin and Smith, which were designed with the aim of testing the predictive power of the competitive equilibrium model.