Mathematical Properties of a Combined Cournot-Stackelberg model

Fabio Tramontana, Laura Gardini () and T?nu Puu ()
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T?nu Puu: CERUM, Ume? University, SE-90187 Ume?, Sweden

No 1007, Working Papers from University of Urbino Carlo Bo, Department of Economics, Society & Politics - Scientific Committee - L. Stefanini & G. Travaglini

Abstract: The object of this work is to perform the global analysis of a new duopoly model which couples the two points of view of Cournot and Stackelberg. The Cournot model is assumed with isoelastic demand function and unit costs. The coupling leads to discontinuous reaction functions, whose bifurcations, mainly border collision bifurcations, are investigates as well as the global structure of the basins of attraction. In particular, new properties are shown, associated with the introduction of horizontal branches, which di?er significantly when the constant value is zero or positive and small. The good behavior of the model with positive constant is proved, leading to stable cycles of any period.

Keywords: Cournot-Stackelberg duopoly; Isoelastic demand function; Discontinuous reaction functions; Multistability; Border-collision bifurcations. (search for similar items in EconPapers)
JEL-codes: C15 D24 D43 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2010, Revised 2010
New Economics Papers: this item is included in nep-com and nep-ind
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http://www.econ.uniurb.it/RePEc/urb/wpaper/WP_10_07.pdf First version, 2010 (application/pdf)

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