In this paper we try to solve a paradox related to the results of Theocharis (1960). When the number of competitors increases the Cournot–Nash equilibrium loses stability. We relax the assumption about homogeneity in the decision mechanism and show that if we admit heterogeneity than by increasing the number of competitors the stability region on the parameters’ space may enlarge instead of shrinking.
Tramontana, F., Elsadany, A., Xin, B., Agiza, H., Local stability of the Cournot solution with increasing heterogeneous competitors, <<NONLINEAR ANALYSIS: REAL WORLD APPLICATIONS>>, 2015; 26 (N/A): 150-160. [doi:10.1016/j.nonrwa.2015.05.005] [http://hdl.handle.net/10807/67348]
Local stability of the Cournot solution with increasing heterogeneous competitors
Tramontana, Fabio;
2015
Abstract
In this paper we try to solve a paradox related to the results of Theocharis (1960). When the number of competitors increases the Cournot–Nash equilibrium loses stability. We relax the assumption about homogeneity in the decision mechanism and show that if we admit heterogeneity than by increasing the number of competitors the stability region on the parameters’ space may enlarge instead of shrinking.
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