The dynamics of a duopoly Stackelberg game with marginal costs among heterogeneous players.

ABSTRACT: One of the famous economic models in game theory is the duopoly Stackelberg model, in which a leader and a follower firm manufacture a single product in the market. Their goal is to obtain the maximum profit while competing with each other. The desired dynamics for a firm in a market is the convergence to its Nash equilibrium, but the dynamics of real-world markets are not always steady and can result in unpredictable market changes that exhibit chaotic behaviors. On the other hand, to approach reality more, the two firms in the market can be considered heterogeneous. The leader firm is bounded rationale, and the follower firm is adaptable. Modifying the cost function that affects the firms' profit by adding the marginal cost term is another step toward reality. We propose a Stackelberg mo

SUBMITTER: Ahmadi A 

PROVIDER: S-EPMC10075410 | biostudies-literature | 2023

REPOSITORIES: biostudies-literature