Abstract
Purpose Fractional calculus provides powerful tool to build more realistic and accurate mathematical models in economic field. This paper aims to explore a proposed fractional-order differentiated Cournot duopoly game and its discretized game.
Design/methodology/approach Conditions for existence and uniqueness of the proposed game's solution are derived. The existence of Nash equilibrium point and its local and global stability are obtained. Furthermore, local stability analysis of the discretized game is investigated. The effects of fractional-order on game's dynamics are examined, along with other parameters of the game, via the 2D bifurcation diagrams in planes of system's parameters are acquired.
Findings Theoretical and numerical simulation results demonstrate rich variety of interesting dynamical behaviors such as period-doubling and Neimark-Sacker bifurcations, attractors' crises in addition to chaotic attractors. The results demonstrated that the stability Nash equilibrium point of the game can be lost by period doubling or Neimark-Sacker bifurcations.
Practical implications Oligopoly games are pivotal in the mathematical modeling of some substantial economic areas such as industrial organization, airline, banking, telecommunication companies, international trade and also macroeconomic analysis of business cycles, innovation and growth.
Originality/value Although the Cournot game and its variants have attracted great interest among mathematicians and economists since the time of its proposition till present, memory effects in continuous-time and discrete-time Cournot duopoly game have not been addressed yet. To the best of author's knowledge, this can be considered as the first attempt to investigate this problem of fractional-order differentiated Cournot duopoly game. In addition, studying more realistic models of Cournot oligopoly games plays a pivotal role in the mathematical investigation and better understanding of some substantial economic areas such as industrial organization, airline, banking, telecommunication companies, international trade and also in macroeconomic analysis of business cycles, innovation and growth.