An experiment designed to assess the effects of advance-production decision
s on posted-offer market performance is reported. Six of the twelve triopol
ies were conducted under standard posted-offer rules. In the remaining mark
ets sellers made binding production commitments prior to posting prices, an
alteration that shifts the unique stage-game Nash equilibrium from the com
petitive to the Cournot outcome. As predicted, advance-production decisions
raised prices and lowered output. Nevertheless, stable Cournot outcomes we
re never observed. (C) 1999 Elsevier Science B.V. All rights reserved. JEL
classification: L1; C9.