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Lamantia, Fabio; Negriu, Anghel; Tuinstra, Jan

Technology choice in an evolutionary oligopoly game. (English) Zbl 1419.91468

Decis. Econ. Finance 41, No. 2, 335-356 (2018).
Summary: In this paper, we propose and analyze a two-stage oligopoly game in which firms first simultaneously choose production technologies and in the second stage simultaneously choose production quantities. After characterizing the Nash equilibrium of the game, we cast our static model in a dynamic setting exploring the stability properties of the market equilibrium in two different cases: (i) exogenously distributed technologies and Cournot adjustments and (ii) endogenously distributed technologies in an infinite population game with Cournot-Nash equilibrium outputs. The main aim of the paper is that of extending the results about Cournot oligopoly stability in an evolutionary setting of heterogeneous decreasing returns-to-scale technologies. We show how the interplay between production decisions and R&D decisions can generate endogenous market fluctuations leading to complex dynamic phenomena.

Cited in 2 Documents

MSC:

91B54 Special types of economic markets (including Cournot, Bertrand)
91B38 Production theory, theory of the firm
91A22 Evolutionary games
91A20 Multistage and repeated games

Keywords:

oligopoly games; evolutionary dynamics; technology adoption

Software:

E&F Chaos
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Full Text: DOI

References:

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