Dynamics of a Duopoly Game in R&D Efforts with Asymmetric Information

Georges Sarafopoulos (), Despoina Terzopoulou () and Kosmas Papadopoulos ()
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Georges Sarafopoulos: Democritus University of Thrace
Despoina Terzopoulou: Democritus University of Thrace
Kosmas Papadopoulos: Democritus University of Thrace

A chapter in Economic Growth, Prosperity and Sustainability in the Economies of the Balkans and Eastern European Countries, 2024, pp 129-143 from Springer

Abstract: Abstract The present study extends Sarafopoulos and Terzopoulou (Sarafopoulos and Terzopoulou in Global, regional and local perspectives on the economies of Southeastern Europe. Springer, 2023b) to the case where the players of the game do not have the same information when choosing strategies. We suppose that the bounded rational player is characterized by knowing some information about the next time R&D efforts of its opponent. We examine the existence and stability of equilibria of this system. In order to show the effect of the speed of adjustment of the bounded rational player on the dynamics of the system, numerical simulations are carried out. We show that the speed of adjustment of the bounded rational player may change the stability of the Nash equilibrium and cause a structure to behave chaotically. Finally, an attempt is made to control the chaotic behavior.

Keywords: Discrete dynamical system; Heterogenous expectations; Stability; Chaotic behavior; R&D (search for similar items in EconPapers)
JEL-codes: C62 C72 D43 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:spr:prbchp:978-3-031-58437-4_7

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DOI: 10.1007/978-3-031-58437-4_7

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