A dynamic duopoly model with bounded rationality based on constant conjectural variation |
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| Institution: | 1. Center for Quantitative Economics, Jilin University, Changchun, Jilin 130012, PR China;2. School of Business, Jilin University, Changchun, Jilin 130012, PR China;1. Department of Mathematics, University of Kalyani, Kalyani, West Bengal 741 235, India;2. Department of Mathematics, Faculty of Science & Arts - Rabigh, King Abdulaziz University, Rabigh 25732, Saudi Arabia;3. DBIOS, University of Turin, via Accademia Albertina 13, Turin 10123, Italy;4. Dipartimento di Matematica “Giuseppe Peano”, Università di Torino,via Carlo Alberto 10, Torino 10123, Italy;5. Department of Mathematics, Institute of Science, Banaras Hindu University, Varanasi 221005, India;1. School of Information Technology, Jiangxi University of Finance and Economics, Nanchang 330013, China;2. School of Business Administration, Northeastern University, Shenyang 110819, China;3. Department of Economics, Acadia University, Wolfville, NS B4P 2R6, Canada;4. School of Business Administration, Acadia University, Wolfville, NS B4P 2R6, Canada |
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| Abstract: | In this paper, we construct dynamic models on the basis of constant conjectural variation. Duopolists with dynamic adjustment behavior of bounded rationality have been considered. Numerical simulation is used to illustrate the complexion of models. The existence of equilibrium points and their stability in this nonlinear system are discussed. We study two special cases of symmetry model and Bertrand model with conjectural variation. When the speed of output adjustment changes, a series of complex phenomena including bifurcation, chaos and strange attractors can be observed in our models. We also analyzed the importance of the initial conditions to the system that a tiny variation of the initial value will cause dramatic fluctuations in output. |
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