The Complexion of Multi-period Stackelberg Triopoly Game with Bounded Rationality

Yu, Yu; Wei, Yu Chen

doi:10.1007/s10614-018-9834-5

Cited by 7 publications

(1 citation statement)

References 30 publications

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“…It is necessary to establish a dynamic game model based on bounded rationality. In the proposed approach, we will improve and supplement the model according to the processing method of reference [34,39,40,[42][43][44][45][46][47] and then analyse the dynamic system. In the second stage of the game, the respective pro t function is derived, and the marginal pro t of the enterprise in period is: e product takes production as the decision variable.…”

Section: Local Stability Analysis Of Dynamic Decision Modelmentioning

confidence: 99%

Research on the Influence of Bounded Rationality and Product Differentiation on the Stability of Steel Industry Market

Duan

Zeng-lin

et al. 2020

Discrete Dynamics in Nature and Society

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At present, the problems of homogenization and low quality in China’s iron and steel industry are particularly prominent and the ability of the enterprises to cope with change is insufficient. Adopting product differentiation strategy and dynamic adjustment strategy can allow steel enterprises and the industry to better adapt to future changes. By introducing the product differentiation degree (substitution coefficient) and the bounded rationality strategy to simulate these two strategic means, this paper constructs an extended two-stage dynamic game model to analyse the dynamic game scenarios and steel market stability in China. As new findings, we report the following: (1) The system is more likely to fall into an unbalanced state when multiple enterprises adopt the policy of dynamic output adjustment simultaneously. (2) Enterprises with large output and small output have different output adjustment policies. When enterprises with big-scale output adopt a bit larger adjustment policies, enterprises with small output will be strongly impacted, and the available adjustment space will be sharply compressed. (3) The gradual increase in the difference between products reduces the stability of the market. (4) When product differentiation and bounded rationality strategies coexist, the steel market may fall into an unbalanced state when the degree of product difference increases excessively and the enterprise adopts more drastic output adjustment policies. Therefore, there are pros and cons to product differentiation strategy and bounded rationality adjustment strategy. When each steel oligopoly enterprise formulates a production plan, it needs to comprehensively consider the output changes of the other enterprises and carefully weigh the strategic issues.

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Section: Local Stability Analysis Of Dynamic Decision Modelmentioning

confidence: 99%

Research on the Influence of Bounded Rationality and Product Differentiation on the Stability of Steel Industry Market

Duan

Zeng-lin

et al. 2020

Discrete Dynamics in Nature and Society

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Insights on the Theory of Robust Games

Crespi,

Radi,

Rocca

2023

Comput Econ

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A robust game is a distribution-free model to handle ambiguity generated by a bounded set of possible realizations of the values of players’ payoff functions. The players are worst-case optimizers and a solution, called robust-optimization equilibrium, is guaranteed by standard regularity conditions. The paper investigates the sensitivity to the level of uncertainty of this equilibrium focusing on robust games with no private information. Specifically, we prove that a robust-optimization equilibrium is an $$\epsilon $$ ϵ -Nash equilibrium of the nominal counterpart game, where $$\epsilon $$ ϵ measures the extra profit that a player would obtain by reducing his level of uncertainty. Moreover, given an $$\epsilon $$ ϵ -Nash equilibrium of a nominal game, we prove that it is always possible to introduce uncertainty such that the $$\epsilon $$ ϵ -Nash equilibrium is a robust-optimization equilibrium. These theoretical insights increase our understanding on how uncertainty impacts on the solutions of a robust game. Solutions that can be extremely sensitive to the level of uncertainty as the worst-case approach introduces non-linearity in the payoff functions. An example shows that a robust Cournot duopoly model can admit multiple and asymmetric robust-optimization equilibria despite only a symmetric Nash equilibrium exists for the nominal counterpart game.

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