Imitation of successful behaviour in cournot markets

Abstract

In an experimental standard Cournot oligopoly we test the importance of models of behaviour characterised by imitation of successful behaviour, in particular when the environment be-comes more complex. We find that the players do not rely more on imitation in more de-manding environments. We explain that the different pattern of output decisions in such environments seems predominantly related to a general disorientation of the players, and more specifically to a significant decrease of best-responses. Imitation has played an important role in the recent literature on learning and adaptive behaviour in economics.1 Imitation seems easy and straightforward, it does not use particularly many cognitive skills and it does not require much in-formation. Imitation certainly qualifies as a ‘fast and frugal heuristics for making decisions ’ (Gigerenzer and Goldstein, 1996). Not surprisingly, conventional wis-dom asserts that imitation of the successful behaviour of others is likely in situa-tions with little information or understanding. Yet imitation, although deemed easy, need not be a realistic mode of behaviour. To assess the extent of imitative behaviour, we set up an experimental symmetric Cournot market under different