Complex Dynamics in a Mixed Duopoly Game Based on Relative Profit Maximization
Yuqi Dou
*
Liaoning Normal University, Dalian, China.
Xingyu Liu
Liaoning Normal University, Dalian, China.
*Author to whom correspondence should be addressed.
Abstract
In this paper, the complex dynamic behavior of a mixed duopoly game model is studied. Based on the principle of relative profit maximization and bounded rational expectation, the corresponding discrete dynamic systems are constructed in the case of nonlinear cost function. In theory, the conditions for the local stability of Nash equilibrium are given. In terms of numerical experiments, bifurcation diagrams are used to depict the effects of product differences, adjustment speed, and other parameters on the stability of Nash equilibrium.
Keywords: Mixed duopoly, relative profit maximization, bounded rational, nash equilibrium point, stability