Oligopoly game: Price makers meet price takers

Anufriev, Mikhail; Kopányi, Dávid

doi:10.1016/j.jedc.2018.02.013

Cited by 8 publications

(2 citation statements)

References 38 publications

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“…This result is partially confirmed by experiments in Apesteguia et al (2007) and by a nonlinear evolutionary oligopoly in Radi (2017) where the Walrasian equilibrium results to be asymptotically stable but coordination problems may destabilize this market-equilibrium configuration and the Cournot-Nash equilibrium may gain stability, at least in Milnor's sense, see Milnor (1985). Further relevant contributions on this issue are Vriend (2000) and Anufriev and Kopányi (2018).…”

Section: Nonlinear Dynamics In Oligopoly and Monopoly Modelsmentioning

confidence: 68%

Some reflections on past and future of nonlinear dynamics in economics and finance

Anufriev

Radi

Tramontana

2018

Decisions Econ Finan

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This paper offers an overview of the literature on the economic and financial applications of theory of nonlinear dynamics, especially bifurcation theory. After a short introductory discussion of the first nonlinear dynamic models in social sciences and the economic relevance of the zoo of bifurcations and complicated dynamics that such models can generate, we present an overview of the literature on nonlinear dynamic models in the areas of underdevelopment, environmental poverty traps, the management of common goods, industrial organization and financial markets. The review of the literature is enriched by reflections and ideas for future research.

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Section: Nonlinear Dynamics In Oligopoly and Monopoly Modelsmentioning

confidence: 68%

Some reflections on past and future of nonlinear dynamics in economics and finance

Anufriev

Radi

Tramontana

2018

Decisions Econ Finan

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“…The main drivers of nonlinear dynamics in oligopoly games are non-perfect expectation schemes or adaptive-adjustment processes (Bischi et al, 2000(Bischi et al, , 2007Bischi & Kopel, 2001). Evolutionary games with nonlinear dynamics find applications in environmental economics (Antoci et al, 2011), resource economics (Bischi et al, 2013(Bischi et al, , 2015aBischi & Lamantia, 2009;Lamantia & Radi, 2015), financial markets (Blaurock et al, 2023), housing markets (Dieci et al, 2018;Schmitt & Westerhoff, 2022), models with expectations and learning (Anufriev et al, 2013;Radi, 2017;Anufriev & Kopányi, 2018), industrial organization (Kopel et al, 2014;Lamantia & Radi, 2018), markets with incomplete information (Droste et al, 2002;Bischi et al, 2015b), production-location problems (Radi et al, 2021), segregation dynamics (Radi & Gardini, 2018;Harting & Radi, 2020).…”

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confidence: 99%

Nonlinear dynamics and game-theoretic modeling in economics and finance

Bischi,

Baiardi,

Lamantia

et al. 2024

Ann Oper Res

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In this foreword to the Special Issue “Nonlinear dynamics and game-theoretical modeling in economics and finance” we review the contributions in the issue highlighting the economic results and the connections with aspects of dynamic analysis. Indeed, the common theme of the contributions is the focus on system dynamics and the latest analytical techniques. This issue is devoted to celebrating the 70th birthday of Professor Laura Gardini, who inspired a generation of scholars in the study of discrete-time systems and global methods of analysis.

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Walrasian versus Cournot behavior in an oligopoly of boundedly rational firms

Radi

2017

J Evol Econ

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An evolutionary oligopoly game, where firms can select between the best-reply rule and the Walrasian rule, is considered. The industry is characterized by a finite number of ex-ante homogeneous firms that, characterized by naÃ¯ve expectations, decide next-period output by employing one of the two behavioral rules. The inverse demand function is linear and all firms have the same quadratic and convex cost function (decreasing return to scale). Based upon realized profits, the distribution of behavioral rules is updated according to a replicator dynamics. The model is characterized by two equilibria: the Cournot-Nash equilibrium, where all firms adopt the best-reply rule and produce the Cournot-Nash quantity, and the Walrasian equilibrium, where all firms adopt the Walrasian rule and produce the Walrasian quantity. The analysis reveals that the Walrasian equilibrium is globally stable as long as the rate of change of marginal cost exceeds the sum of residual market price sensitivities to output. If not, the Walrasian equilibrium loses stability and an attractor, representing complicated dynamics with evolutionary stable heterogeneity, arises through a bifurcation. As the propensity of firms to select the more profitable behavioral rule increases, the attractor disappears through a global bifurcation and the Cournot-Nash equilibrium can become a global Milnor attractor. To sum up, the best-reply rule can be evolutionary dominant over the Walrasian rule and this can lead an oligopoly to select the Cournot-Nash equilibrium

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Oligopoly game: Price makers meet price takers

Cited by 8 publications

References 38 publications

Some reflections on past and future of nonlinear dynamics in economics and finance

Some reflections on past and future of nonlinear dynamics in economics and finance

Nonlinear dynamics and game-theoretic modeling in economics and finance

Walrasian versus Cournot behavior in an oligopoly of boundedly rational firms

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