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Experimental Economics on Firm’s Behavior: Entry Game Approach

Amrita Nugraheni Saraswaty, SE.,M.Sc., AMRITA NUGRAHENI SARASWATY (2014) Experimental Economics on Firm’s Behavior: Entry Game Approach. Jurnal Ekonomi Kuantitatif Terapan, Volume. ISSN 2301-8968

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Abstract

The paper analyzes subject's behaviour in evolutionary process of entry game. The experiment is designed to analyze the behavior of the subject. The experiment is set in sequential entry game. Process of the game was conducted under asymmetric information, uncertainty, payoff perturbation and random matching. The subject of the experiment were students of the Universitas Udayana, Bali, Indonesia. Subject who play as new-entrance firms tend to choose "stay-out" strategy when the uncertainty and the amount of loss increase. Meanwhile, the subject who play as an incumbent firm, which set to have more information about the game (market) rather than the new-entrances, most of the time abuse their position by choose "threat" strategy, which not a credible strategy for some of them. Experimental studies shows that new entrance tend to weight more on lost when the risk increase (from risk averse setting to risk seeking setting), and tend to choose sure value over a lotteries although the expected value from lotteries is higher or the same. The findings support the reason that Indonesia youngstres tend to choose a job as PNS or employee of existing firms. The results also support the reason that Indonesian businessman is more willing to open a new business if they have a guarantee for their loses.

Item Type: Article
Uncontrolled Keywords: entry Game, experiment, assymentry information, lost aversion
Subjects: L Education > L Education (General)
Divisions: Faculty of Law, Arts and Social Sciences > School of Education
Depositing User: Mr. Repository Admin
Date Deposited: 07 Jun 2016 21:58
Last Modified: 21 Jun 2016 05:58
URI: http://erepo.unud.ac.id/id/eprint/7856

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