Experimental Game 2
Capacity constraints

The capacity constraint game you played for class was originally played by students for actual money as part of a research project that I conducted. The motivating question was whether companies who profit both from consumers and from negotiated deals with suppliers have incentive to reduce capacity strategically. The game the research subjects played was only slightly different -- there were always exactly 20 students competing, but the number of available slots ranged from 4 to 20.

The game was also played by executives of a couple of companies that agreed to participate. Their results were not much different. The experimental results, overall, point to incentives to reduce capacity excluding between 20% and 30% of all suppliers.

If you are curious (this is not required reading, certainly), you may read the results of that research.

Please download the paper from SSRN: An Experiment on Strategic Capacity Reduction.