On the Dynamics of a Duopoly Game with Differentiated Goods

Sarafopoulos, Georges

doi:10.1016/s2212-5671(15)00016-7

Cited by 15 publications

(3 citation statements)

References 18 publications

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“…Following Knickerbocker's (1973) pioneering study, many IB scholars have also postulated that firms "follow the leader" when entering foreign markets and are slow to reverse what may turn out to be mistaken decisions. For further discussion of entry processes, see Sarafopoulos, 2015; for a discussion of sequential games, see Also-Ferre (2016).…”

Section: Solution Of the Entry Problemmentioning

confidence: 99%

Cross‐investments by multinationals: A new perspective

Casson,

Wadeson

2023

Global Strategy Journal

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Research SummaryCross‐flows of foreign direct investment (FDI) occur when firms invest in each other's home countries, affecting the terms of competition in each market. They are explained by internalization theory but have never been comprehensively investigated. This article models cross‐investment in a duopoly with differentiated products. The firms decide whether to enter each market and whether to serve it through trade or local production. The model combines firm‐, country‐, and industry‐level factors. It places cross‐investment in the wider context of cross‐sourcing, including cross‐trading and asymmetric sourcing. It reveals different forms of cross‐investment rather than being limited to cross‐multidomestic. Overall, cross‐investment is favored by highly differentiated products, low comparative advantage, large markets, high trade costs, and low costs of FDI.Managerial SummaryCross‐investment, where firms conduct FDI into each other's home countries, is an important phenomenon but has received little recent attention in international business literature. This article seeks, through mathematical modeling, to establish a better understanding of it in the wider context of cross‐sourcing. This helps to show how the strategy of the individual firm fits with those of the other firms in an international industry and how different possible industry structures and performance levels result. It includes choices over the locations from which markets are served being a potential source of first‐mover advantage. For instance, committing to producing in a country could reduce the cost of serving its market, potentially altering the equilibrium outcome in favor of the first mover.

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Section: Solution Of the Entry Problemmentioning

confidence: 99%

Cross‐investments by multinationals: A new perspective

Casson,

Wadeson

2023

Global Strategy Journal

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“…Fanti and Gori [16] investigated the differentiated competition duopoly game. Sarafopoulos [17] explored the dynamics of a nonlinear duopoly game with differentiated products. Askar and Al-khedhairi [18] discussed the influences of a cubic utility function on the stability of a nonlinear differentiated Cournot duopoly game.…”

Section: Introductionmentioning

confidence: 99%

Dynamics of a Cournot Duopoly Game with a Generalized Bounded Rationality

Al-khedhairi

2020

Complexity

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In this paper, the dynamics of Cournot duopoly game with a generalized bounded rationality is considered. The fractional bounded rationality of the Cournot duopoly game is introduced. The conditions of local stability analysis of equilibrium points of the game are derived. The effect of fractional marginal profit on the game is investigated. The complex dynamics behaviors of the game are discussed by numerical computation when parameters are varied.

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“…Some authors considered duopolies with homogeneous expectations and found a variety of complex dynamics in their games, such as appearance of strange attractors (Agiza, 1999;Agiza et al, 2002;Agliari et al, 2005Agliari et al, , 2006Bischi and Kopel, 2001;Kopel, 1996;Puu, 1998;Sarafopoulos, 2015b;Sarafopoulos et al, 2019a). Also, models with heterogeneous agents were studied (Agiza andElsadany, 2003, 2004;Agiza et al, 2002;Den Haan, 2001;Fanti and Gori, 2012;Hommes, 2006;Sarafopoulos, 2015a;Sarafopoulos et al,2017Sarafopoulos et al, , 2018Sarafopoulos et al, , 2019bTramontana, 2010;Zhang et al, 2007).…”

Section: Introductionmentioning

confidence: 99%

Dynamics of a Cournot Game with Differentiated Goods and Asymmetric Cost Functions based on Relative Profit Maximization

Sarafopoulos¹,

Papadopoulos²

2019

EJIS

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This paper tries to investigate the complex characteristics behind quantity competition using generalized relative profit functions. For this purpose, we study the dynamics of a nonlinear Cournot -type duopoly game with differentiated goods and generalized relative profit maximization. We suppose a linear demand and asymmetric cost functions. The game is modelled with a system of two difference equations. Results concerning the equilibria of the economic model and their stability are presented and the occurrence of bifurcations is stated. We show that the model gives more complex, chaotic and unpredictable trajectories. Numerical experiments are presented.

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On the Dynamics of a Duopoly Game with Differentiated Goods

Cited by 15 publications

References 18 publications

Cross‐investments by multinationals: A new perspective

Cross‐investments by multinationals: A new perspective

Dynamics of a Cournot Duopoly Game with a Generalized Bounded Rationality

Dynamics of a Cournot Game with Differentiated Goods and Asymmetric Cost Functions based on Relative Profit Maximization

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