ICES Experimental Economics Brown Bag Lecture
An Experimental Study of Oligopoly with Uncertainty
Friday, October 17, 2025 4:00 PM to 5:00 PM EDT
Vernon Smith Hall (formerly Metropolitan Building), Room 5075
The Interdisciplinary Center for Economic Science (ICES) presents an ICES Brown Bag Lecture featuring:
George Mason University
An Experimental Study of Oligopoly with Uncertainty
Abstract
This paper experimentally tests a model of oligopolistic competition under cost uncertainty and limited price information (Martinelli and Xiao, 2025). The model predicts that the nature of price competition depends critically on who becomes informed and how costly search is. When captive consumers become better informed, all firms lower prices; when non-captive consumers gain information, low-cost firms cut prices while high-cost firms raise them. When consumers can endogenously acquire information through costly search, firm entry has no effect on prices when search frictions are high but increases price dispersion when search costs are low. We design a controlled laboratory experiment to test these predictions and to examine how information frictions and cost heterogeneity jointly shape market outcomes and efficiency.
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