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Abstract

The present study analyses the dynamics of a Cournot duopoly with managerial sales delegation and bounded rational players. We find that when firms’ owners hire a manager and delegate the output decisions to him, the unique Cournot-Nash equilibrium is more likely to be destabilised through a flip bifurcation than when firms maximise profits. Moreover, highly periodicity and deterministic chaos can also occur as the managers’ bonus increases.



Item Type: MPRA Paper -

Original Title: Stability analysis in a Cournot duopoly with managerial sales delegation and bounded rationality-

English Title: Stability analysis in a Cournot duopoly with managerial sales delegation and bounded rationality-

Language: English-

Keywords: Bifurcation; Chaos; Cournot; Duopoly; Managerial incentive contracts-

Subjects: L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L13 - Oligopoly and Other Imperfect MarketsD - Microeconomics > D4 - Market Structure, Pricing, and Design > D43 - Oligopoly and Other Forms of Market ImperfectionC - Mathematical and Quantitative Methods > C6 - Mathematical Methods ; Programming Models ; Mathematical and Simulation Modeling > C62 - Existence and Stability Conditions of Equilibrium-





Author: Fanti, Luciano

Source: https://mpra.ub.uni-muenchen.de/33828/







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