EQUAL PROFITS AS A FAIR DIVISION
YALE UNIV NEW HAVEN CT COWLES FOUNDATION FOR RESEARCH IN ECONOMICS
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This paper reports the results of a duopoly experiment in which each firm was represented by one subject, and the two subjects comprising a duopoly could send messages to one another prior to making their decisions. The questions to which the experiment is addressed are 1 To what extent are a pair of subjects able to agree on a joint course of action. 2 When subjects agree, is the profit point they agree upon Pareto optimal, and 3 Among Pareto optimal points chosen, does any particular point, such as the joint profit maximum, the Nash cooperative game solution, or the point of equal profits, predominate.
- Economics and Cost Analysis
- Statistics and Probability