Nonlinear dynamics in a Cournot duopoly with isoelastic demand

Abstract

This paper analyses the dynamics of a nonlinear Cournot duopoly with general isoelastic demand (quasi-linear preferences) andquantity-setting firms that have incomplete information about the market demand. Unlike existing papers, we propose a modelwhere the price elasticity of demand is different from one. This causes interesting local and global dynamic events that cannot beobserved in the case of unit-elastic demand and homogeneous players. In particular, the global behaviour of the map is studiedthrough the critical curves technique, and numerical simulations show coexistence of attractors, coordination failures and complexstructures of the basins of attraction

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Effect of information asymmetry in Cournot duopoly game with bounded rationality

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