In this article, we analyse a duopolistic Cournotian game with firms producing differentiated goods, marginal costs are constant and demand functions are microfounded. We consider firms adopting different decisional mechanisms which are based on a reduced degree of rationality. In particular, we assume that a firm adopts the local monopolistic approximation approach, while the rival adjusts its output level according to the gradient rule. We provide conditions for the stability of the Nash equilibrium and investigate some bifurcation scenarios as parameters vary. The main finding of the article is that both a high level and a low level in goods differentiation may have a destabilising role in the system.

Heterogeneous players in a Cournot model with differentiated products

Caravaggio A.
;
2018-01-01

Abstract

In this article, we analyse a duopolistic Cournotian game with firms producing differentiated goods, marginal costs are constant and demand functions are microfounded. We consider firms adopting different decisional mechanisms which are based on a reduced degree of rationality. In particular, we assume that a firm adopts the local monopolistic approximation approach, while the rival adjusts its output level according to the gradient rule. We provide conditions for the stability of the Nash equilibrium and investigate some bifurcation scenarios as parameters vary. The main finding of the article is that both a high level and a low level in goods differentiation may have a destabilising role in the system.
File in questo prodotto:
Non ci sono file associati a questo prodotto.

I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.

Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11369/403418
Citazioni
  • ???jsp.display-item.citation.pmc??? ND
  • Scopus 0
  • ???jsp.display-item.citation.isi??? 0
social impact