Complex dynamics and synchronization of a duopoly game with bounded rationality

H.N. Agiza, A.S. Hegazi and A.A. Elsadany

Mathematics and Computers in Simulation (MATCOM), 2002, vol. 58, issue 2, 133-146

Abstract: A dynamic Cournot game characterized by players with bounded rationality is modeled by two non-linear difference equations. The stability of the equilibria of the discrete dynamical system is analyzed. As some parameters of the model are varied, the stability of Nash equilibrium is lost and the complex chaotic behavior occurs. Synchronization of two dynamic Cournot duopoly games are considered. In the case of identical players, such dynamical system becomes symmetric, and this implies that synchronized dynamics can be obtained by a simpler one-dimensional model whose dynamics summarizes the common behavior of the two identical players.

Keywords: Duopoly games; Non-linear demand function; Bounded rationality; Synchronization; Natural Lyapunov exponents (search for similar items in EconPapers)
Date: 2002
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Citations: View citations in EconPapers (58)

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