The stability of dynamic n-person Cournot games with strategic adjustment costs

Chun Wang, Wei Tang and Jinxiu Pi

Chaos, Solitons & Fractals, 2024, vol. 179, issue C

Abstract: In certain Cournot games, firms have to incur additional costs when adjusting production plans, such as scheduling of employees and machines, which is usually neglected. Therefore, by designing a quadratic cost function, these strategic adjustment costs are introduced in a dynamic n-person Cournot game with adaptive expectation. And both theoretical and numerical analyses demonstrate that the costs improve the stability of the original Cournot–Nash equilibrium. This implies that the Cournot–Nash equilibria with over three firms are not as fragile as previously believed.

Keywords: Dynamic n-person Cournot games; Strategic adjustment costs; Adaptive expectation; Asymptotical stability (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:chsofr:v:179:y:2024:i:c:s0960077923013115

DOI: 10.1016/j.chaos.2023.114409

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