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Analysis of a Triopoly Cournot Game with Capacity Constraint and Heterogeneous Players

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3 Author(s)
Zhanguo Li ; Coll. of Inf. & Manage. Sci., Henan Agric. Univ., Zhengzhou, China ; Yali Lu ; Fei Wang

In order to study the influence of parameters on the dynamics of triopoly game, this article constructed a triopoly game model with capacity constraint and three different decision-making rules: bounded rational method, adaptive method and naive method. By employing the iso-elastic price function and the logarithmic cost function, numerical simulations were carried out to analyze the effects of the output adjustment speed and the weight and the capacity constraint on the model's dynamics. The results show that improper values of the output adjustment speed and the weight can induce chaotic variation of the three players' outputs. Moreover, the increasing output adjustment speed can cause higher average profit for the player with bounded rational strategy while the increasing weight can induce higher average profit for the player with adaptive method. Furthermore, when the capacity constraint drops, the three players' average profits will decrease their outputs' amplitude as well. From the view point of maximum profit, naive strategy is optimal among the three strategies.

Published in:

Information Technology, Computer Engineering and Management Sciences (ICM), 2011 International Conference on  (Volume:4 )

Date of Conference:

24-25 Sept. 2011