Cournot model with investments to change the market size

• Type: Article in International Scientific Journal
• Date: 2007

Authors

Alberto A. Pinto (Author) FCUP; Ferreira, FA (Author) Other; Ferreira, M (Author) Other; Bruno M P M Oliveira (Author) FCNAUP

Journal

The Journal is awaiting validation by the Administrative Services.

Title: Proc. Appl. Math. Mech. - PAMM

Vol. 7

Pages: 1041303-1041304

ISSN: 1617-7061

Other information

Authenticus ID: P-00G-Z33

DOI: 10.1002/pamm.200700634

Abstract (EN): We present a new deterministic dynamical model on the market size of Cournot competitions, based on Nash equilibria of R&D investment strategies to increase the size of the market of the firms at every period of the game. We compute the unique Nash equilibrium for the second subgame and the profit functions for both firms. Adding uncertainty to the R&D investment strategies, we get a new stochastic dynamical model and we analyse the importance of the uncertainty to reverse the initial advantage of one firm with respect to the other.

Language: English

Type (Professor's evaluation): Scientific