Effect of information asymmetry in Cournot duopoly game with bounded rationality

09/28/2018

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by   Masahiko Ueda, et al.

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We investigate the effect of information asymmetry on a dynamic Cournot duopoly game with bounded rationality. Concretely, we study how one player's possession of information about the other player's behavior in a duopoly affects the stability of the Cournot-Nash equilibrium. We theoretically and numerically show that the information stabilizes the Cournot-Nash equilibrium and suppresses chaotic behavior in the duopoly.