The Dynamics of Duopoly Output Games Involving Cournot and Related Best‐Response Strategies

John A. Rickard

The Economic Record, 1979, vol. 55, issue 1, 68-75

Abstract: The paper considers a variety of perfect information duopoly games involving the Cournot and related best‐response strategies. Firms record their output at the end of each business period. At the beginning of a new period they have to plan their new output; they do so in an attempt to maximize their profits. The importance of discrete time and the resulting time interval between successive outputs is discussed. The difference equations appropriate to the various games are solved exactly, and it is shown that there is always a stable approach to equilibrium at the Cournot point. The convergence of the solutions is discussed.

Date: 1979
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