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Local stability of the Cournot solution with increasing heterogeneous competitors
Journal article   Peer reviewed

Local stability of the Cournot solution with increasing heterogeneous competitors

Fabio Tramontana, A. A. Elsadany, Baogui Xin and H. N. Agiza
Nonlinear analysis: real world applications, Vol.26, pp.150-160
01/12/2015
DOI: https://doi.org/10.1016/j.nonrwa.2015.05.005

Abstract

Mathematics Mathematics, Applied Physical Sciences Science & Technology
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. (C) 2015 Elsevier Ltd. All rights reserved.

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