Cournot model with investments to change the market size

• Type: Article in International Conference Proceedings Book
• Date: 2007

Authors

A. A. Pinto (Author) FCUP; F. A. Ferreira (Author) Other; M. Ferreira (Author) Other; B. M. P. M. Oliveira (Author) Other

Conference proceedings International

Title: Proceedings in Applied Mathemetics and Mechanics (PAMM)

Pages: 1041303-1041304

Conference in Applied Mathemetics and Mechanics

Weinheim, Germany

Scientific classification

FOS: Natural sciences > Mathematics

Other information

Resumo (PT): 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.

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