NASH EQUILIBRIUM AND BUYER RATIONING RULES: EXPERIMENTAL EVIDENCE

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Abstract
Laboratory experiments compare the results of two different buyer rationing rules on Bertrand‐Edgeworth duopoly markets. The two rationing rules, a value queue and a random queue, specify the ordering of buyers and generate different predictions under otherwise identical conditions. These experiments show market outcome can chane significantly with a change in the ordering of buyers. The direction of these changes agrees with the predictions of the stage‐game Nash equilibrium. Thus, the single‐shot Nash equilibrium is show to have predictive power even in repeated games.