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- Title
A robust route to randomness in a simple Cournot duopoly game where ambiguity aversion meets constant expectations.
- Authors
Radi, D.; Gardini, L.; Goldbaum, D.
- Abstract
In this paper we investigate the dynamics of a duopoly game with ambiguity aversion regarding uncertainty in demand and constant expectations concerning competitor production. The focus is on an asymmetric Cournot game where players engage in robust optimization and have different beliefs about the possible realizations of the random parameters of the price function. The players' ambiguity aversion introduces multiple equilibria and instability that otherwise would not be present. The investigation of the global dynamics of the game reveals the emergence, through border-collision bifurcations, of periodic and chaotic dynamics.
- Subjects
AVERSION; AMBIGUITY; ROBUST optimization; EXPECTATION (Psychology); PRICES
- Publication
Annals of Operations Research, 2024, Vol 337, Issue 3, p769
- ISSN
0254-5330
- Publication type
Article
- DOI
10.1007/s10479-023-05686-8