On the (in)stability of nonlinear feedback solutions in a dynamic duopoly with renewable resource exploitation

Luca Lambertini () and Andrea Mantovani

Economics Letters, 2016, vol. 143, issue C, 9-12

Abstract: We revisit Fujiwara’s (2008) linear–quadratic differential duopoly game to show that the degenerate nonlinear feedback identified by the tangency point with the stationary state line is indeed unstable, given the dynamics of the natural resource exploited by firms. To do so, we fully characterise the continuum of nonlinear feedback solution via Rowat’s (2007) method, thereby identifying the infinitely many stable nonlinear feedback equilibria. This entails that Rowat’s method can be used in games where each player’s instantaneous payoff depends quadratically on all players’ controls.

Keywords: Differential games; Renewable resources; Feedback strategies (search for similar items in EconPapers)
JEL-codes: C73 L13 Q2 (search for similar items in EconPapers)
Date: 2016
References: Add references at CitEc
Citations: View citations in EconPapers (14)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0165176516300878
Full text for ScienceDirect subscribers only

Related works:
Working Paper: On the (in)stability of nonlinear feedback solutions in a dynamic duopoly with renewable resource exploitation (2016)
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: https://EconPapers.repec.org/RePEc:eee:ecolet:v:143:y:2016:i:c:p:9-12

DOI: 10.1016/j.econlet.2016.03.015

Access Statistics for this article

Economics Letters is currently edited by Economics Letters Editorial Office

More articles in Economics Letters from Elsevier
Bibliographic data for series maintained by Catherine Liu ().