Nonlinear dynamics in the Cournot duopoly game with heterogeneous players
By H. Agiza, A. A. Elsadany. Physica A: Statistical Mechanics and its Applications, 2002
267 citations recorded by the source corpus.
We analyze a nonlinear discrete-time Cournot duopoly game, where players have heterogeneous expectations. Two types of players are considered: boundedly rational and naive expectations. In this study we show that the dynamics of the duopoly game with players whose beliefs are heterogeneous, may become complicated. The model gives more complex chaotic and unpredictable trajectories as a consequence of increasing the speed of adjustment of boundedly rational player. The equilibrium points and local stability of the duopoly game are investigated. As some parameters of the model are varied, the stability of the Nash equilibrium point is lost and the complex (periodic or chaotic) behavior occurs. Numerical simulations are presented to show that players with heterogeneous beliefs make the duopoly game behave chaotically. Also, we get the fractal dimension of the chaotic attractor of our map which is equivalent to the dimension of Henon map.
Subfields: Computer Networks and Communications, Economics and Econometrics
View Paper: https://www.semanticscholar.org/paper/62fb27e7582f85544f4b51b75e47d21f7f89fa15
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Citations in the corpus
- RETRACTED: Analysis of nonlinear duopoly game with heterogeneous players (2007, methodology): “The game models with heterogeneous players also have been studied (Agiza and Elsadany, 2003, 2004b; Leonard and Nishimura, 1999; Den-Haan, 2001).”
- Heterogeneous triopoly game with isoelastic demand function (2012, background): “Agiza and Elsadany [2, 3] belong to the first group of authors who studied games with heterogeneous players, and in particular they analyzed the nonlinear dynamics emerging in these kinds of model.”
- Heterogeneous duopoly with isoelastic demand function (2010, methodology): “This approach characterizes the works by Leonard and Nishimura (1999), Den-Haan (2001), Agiza et al. (2002), Agiza and Elsadany (2003, 2004).”