These graphs depict industry total profits, average price and industry total production capacities on 4 distinct (but identical) markets (3 players on each market) over 4 years

The (negative) correlation between total production capacities and average price is quite spectacular in this “Kreps-Scheinkman type” game. The more production capacity is installed, the more intense price competition is:

Which, of course, results in a corresponding (negative) correlation between total production capacity and total profits:

 

These results are taken from our last session at Mines Albi.

 

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