Nonlinear dynamics in a Cournot duopoly with relative profit delegation

Luciano Fanti, Luca Gori () and Mauro Sodini

Chaos, Solitons & Fractals, 2012, vol. 45, issue 12, 1469-1478

Abstract: This paper analyses the dynamics of a nonlinear Cournot duopoly with managerial delegation and homogeneous players. We assume that the owners of both firms hire a manager and delegate output decisions to him or her. Each manager receives a fixed salary plus a bonus based on relative (profit) performance. Managers of both firms may collude or compete. In cases of both collusion and a low degree of competition, we find that synchronised dynamics take place. However, when the degree of competition is high, the dynamics may undergo symmetry-breaking bifurcations, which can cause significant global phenomena. Specifically, there is on–off intermittency and blow-out bifurcations for several parameter values. In addition, several attractors may coexist. The global behaviour of the noninvertible map is investigated through studying a transverse Lyapunov exponent and the folding action of the critical curves of the map. These phenomena are impossible under profit maximisation.

Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0960077912001786
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Nonlinear dynamics in a Cournot duopoly with relative profit delegation (2012)
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:chsofr:v:45:y:2012:i:12:p:1469-1478

DOI: 10.1016/j.chaos.2012.08.008

Access Statistics for this article

Chaos, Solitons & Fractals is currently edited by Stefano Boccaletti and Stelios Bekiros

More articles in Chaos, Solitons & Fractals from Elsevier
Bibliographic data for series maintained by Thayer, Thomas R. ().