Stability analysis in a Cournot duopoly with managerial sales delegation and bounded rationality

Luciano Fanti and Luca Gori ()

MPRA Paper from University Library of Munich, Germany

Abstract: The present study analyses the dynamics of a Cournot duopoly with managerial sales delegation and bounded rational players. We find that when firms’ owners hire a manager and delegate the output decisions to him, the unique Cournot-Nash equilibrium is more likely to be destabilised (through a flip bifurcation) than when firms maximise profits. Moreover, highly periodicity and deterministic chaos can also occur as the managers’ bonus increases.

Keywords: Bifurcation; Chaos; Cournot; Duopoly; Managerial incentive contracts (search for similar items in EconPapers)
JEL-codes: C62 D43 L13 (search for similar items in EconPapers)
Date: 2011-09-30
New Economics Papers: this item is included in nep-bec and nep-com
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:33828

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