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Handbook > Industrial Organization > Experiments > Monopoly Restraint Printer Friendly

Monopoly Restraint Experiment Parameters

The experimental design was standardized for all the monopoly experiments. Each of the five buyers had a capacity to buy a maximum of two units. The seller had a capacity to sell ten units. The table below lists the seller's marginal cost for each of the ten units, and buyers' resale values for each of two units.

Normalized Marginal Costs and Demand

Table 1: Seller's marginal costs and buyer's marginal values.

The actual experiments varied by an additive constant from these normalized levels, in order to control the state of incomplete information more effectively. The total number of trading periods varied among the experiments but was always at least ten. This information was not known in advance by the subjects.

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