Do cost-based pricing biases persist in laboratory markets?

Past accounting experiments have demonstrated significant effects of absorp tion vs variable costing systems on pricing decisions, but in individual se ttings that suppressed market features. The main finding of the current stu dy is that a cost-based pricing bias did not persist in laboratory product markets. Given the opportunity to learn from profit and market feedback, se llers revised their price offers toward optimum in a manner that compensate d for absorption vs variable cost signals. The effects of demand conditions , as revealed through actual trades, dominated the effects of alternative c osting systems. (C) 1999 Elsevier Science Ltd. All rights reserved.