Complex dynamics and synchronization of a duopoly game with bounded rationality

A dynamic Cournot game characterized by players with bounded rationality is modeled by two non-linear difference equations. The stability of the equilibria of the discrete dynamical system is analyzed. As some parameters of the model are varied, the stability of Nash equilibrium is lost and the comp...

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Bibliographic Details
Published in:Mathematics and computers in simulation 2002, Vol.58 (2), p.133-146
Main Authors: Agiza, H.N., Hegazi, A.S., Elsadany, A.A.
Format: Article
Language:English
Subjects:
Applied sciences
Bounded rationality
Duopoly games
Exact sciences and technology
Game theory
Natural Lyapunov exponents
Non-linear demand function
Operational research and scientific management
Operational research. Management science
Synchronization
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Summary:A dynamic Cournot game characterized by players with bounded rationality is modeled by two non-linear difference equations. The stability of the equilibria of the discrete dynamical system is analyzed. As some parameters of the model are varied, the stability of Nash equilibrium is lost and the complex chaotic behavior occurs. Synchronization of two dynamic Cournot duopoly games are considered. In the case of identical players, such dynamical system becomes symmetric, and this implies that synchronized dynamics can be obtained by a simpler one-dimensional model whose dynamics summarizes the common behavior of the two identical players.
ISSN:0378-4754
1872-7166
DOI:10.1016/S0378-4754(01)00347-0