EconPapers    
Economics at your fingertips  
 

ON A COURNOT DUOPOLY GAME WITH DIFFERENTIATED GOODS, HETEROGENEOUS EXPECTATIONS AND A COST FUNCTION INCLUDING EMISSION COSTS

Georges Sarafopoulos () and Kosmas Papadopoulos ()
Additional contact information
Georges Sarafopoulos: Department of Economics, Democritus University of Thrace, Greece
Kosmas Papadopoulos: Department of Economics, Democritus University of Thrace, Greece

Scientific Bulletin - Economic Sciences, 2017, vol. 16, issue 1, 11-22

Abstract: In this study we investigate the dynamics of a nonlinear Cournot- type duopoly game with differentiated goods, linear demand and a cost function that includes emission costs. The game is modeled with a system of two difference equations. Existence and stability of equilibria of this system are studied. We show that the model gives more complex chaotic and unpredictable trajectories as a consequence of change in the parameter of horizontal product differentiation and a higher (lower) degree of product differentiation (weaker or fiercer competition) destabilize (stabilize) the economy. The chaotic features are justified numerically via computing Lyapunov numbers and sensitive dependence on initial conditions. Also, we show that in this case there are stable trajectories and a higher (lower) degree of product differentiation does not tend to destabilize the economy.

Keywords: Cournot duopoly game; Discrete dynamical system; Heterogeneous expectations; Stability; Chaotic behavior. (search for similar items in EconPapers)
JEL-codes: C62 C72 D43 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed

Downloads: (external link)
http://economic.upit.ro/repec/pdf/2017_1_2.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:pts:journl:y:2017:i:1:p:11-22

Access Statistics for this article

Scientific Bulletin - Economic Sciences is currently edited by Logica Banica

More articles in Scientific Bulletin - Economic Sciences from University of Pitesti Contact information at EDIRC.
Series data maintained by Logica Banica ().

 
Page updated 2017-09-02
Handle: RePEc:pts:journl:y:2017:i:1:p:11-22