Oligopoly models with different learning and production time scales

Fausto Cavalli (), Ahmad Naimzada and Mauro Sodini ()
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Fausto Cavalli: Catholic University of Sacred Heart
Mauro Sodini: University of Pisa

Decisions in Economics and Finance, 2018, vol. 41, issue 2, No 11, 297-312

Abstract: Abstract We propose a modelling approach to study Cournotian oligopolies of boundedly rational firms which continuously update production decisions on the basis of information collected periodically. The model consists of a system of differential equations with piecewise constant arguments, which can be recast into a system of difference equations. Considering different economic settings, we study the local stability of equilibrium, proving the destabilizing role of the time lag between two consecutive learning activities. We investigate some particular families of oligopolies showing the occurrence of both flip and Neimark–Sacker bifurcations, as well as the evidence of multistability with the coexistence between different attractors, occurring when oligopolies consisting of both technologically different and identical firms are studied.

Keywords: Cournot oligopolies; Learning and production decisions; Differential equations with piecewise constant argument; Stability; Bifurcations; Multistability (search for similar items in EconPapers)
JEL-codes: C62 L13 (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (5)

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DOI: 10.1007/s10203-018-0225-0

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