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Do short-term laboratory experiments provide valid descriptions of long-term economic interactions? A study of Cournot markets

Published online by Cambridge University Press:  14 March 2025

Hans-Theo Normann ,
Till Requate  and
Israel Waichman
Hans-Theo Normann*
Affiliation:
Duesseldorf Institute for Competition Economics (DICE), University of Duesseldorf, Universitaetstr. 1 Duesseldorf, Germany
Till Requate*
Affiliation:
Department of Economics, University of Kiel, Olshausenstr. 40, 24118 Kiel, Germany
Israel Waichman*
Affiliation:
Department of Economics, University of Heidelberg, Bergheimerstr. 20, 69115 Heidelberg, Germany
*
[email protected]
[email protected]
[email protected]
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Abstract

One key problem regarding the external validity of laboratory experiments is their duration: while economic interactions out in the field are often lengthy processes, typical lab experiments only last for an hour or two. To address this problem for the case of both symmetric and asymmetric Cournot duopoly, we conduct internet treatments lasting more than a month. Subjects make the same number of decisions as in the short-term counterparts, but they decide once a day. We compare these treatments to corresponding standard laboratory treatments and also to short-term internet treatments lasting one hour. We do not observe differences in behavior between the short- and long-term in the symmetric treatments, and only a small difference in the asymmetric treatments. We overall conclude that behavior is not considerably different between the short- and long-term.

Keywords

Internet experimentCournot oligopolyLong-term interactionsMethodologyInternet vs. laboratory experiment

JEL classification

D43: Oligopoly and Other Forms of Market Imperfection D21: Firm Behavior: Theory C93: Field Experiments L13: Oligopoly and Other Imperfect Markets C72: Noncooperative Games
Type
Original Paper
Information
Experimental Economics , Volume 17 , Issue 3 , September 2014 , pp. 371 - 390
Copyright
Copyright © 2013 Economic Science Association

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Footnotes

Electronic Supplementary Material The online version of this article (doi:https://doi.org/10.1007/s10683-013-9373-9) contains supplementary material, which is available to authorized users.

We are grateful to the editor and two anonymous referees for useful comments and suggestions. We are thankful to Dennis Nissen for programming the experiment in Java and also to Markus Karde and Silke Werner for research assistance.

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