Communication in Cournot competition: An experimental study

• We investigate the impact of communication on Cournot duopoly and triopoly.
• As subjects we use both students and managers.
• Managers behave in a similar way in two communication conditions but not students.
• Managers select lower output than students in one communication condition but not in the other.
• We observe more collusion in duopoly than in triopoly.

This study investigates the impact of communication on outcomes in Cournot duopoly and triopoly experiments. Communication is implemented by two different devices, a ‘standardized-communication’ and a ‘free-communication’ device. Using both students and managers as subjects, we find that managers behave in a similar way under both communication devices, while students collude slightly better under free than under standardized communication. Second, while under standardized communication managers select lower outputs than students, we observe no difference in subject pools under free communication. Finally, we observe more collusion in duopoly than in triopoly.