Linear Dynamic Cournot Oligopoly Model with Adaptive Expectations

Strategic Management, Vol. 1, pp. 33-36, 2008

6 Pages Posted: 25 Apr 2009 Last revised: 8 Sep 2009

See all articles by Karol Szomolányi

Karol Szomolányi

University of Economics in Bratislava - Department of Operations Research and Econometrics

Kvetoslava Surmanová

University of Economics in Bratislava

Date Written: March 1, 2008

Abstract

Cournot oligopoly equilibrium is in general dynamically not stable, if on the market act more than two oligopolies (duopolies). In the model it is presumed that oligopolies consider the production of the others to be constant in time. If we extend the model by assumption that oligopolies expect quantities of the others future production, the system is more stable. Such model is more realistic as oligopolies in reality have access to information helping them to better estimate future productions of the others. In the paper we provide an approach, how to deal with a linear Cournot oligopoly dynamic model augmented by adaptive expectations.

Keywords: cournot oligopoly. economic dynamics. adaptive expectations

Suggested Citation

Szomolányi, Karol and Surmanová, Kvetoslava, Linear Dynamic Cournot Oligopoly Model with Adaptive Expectations (March 1, 2008). Strategic Management, Vol. 1, pp. 33-36, 2008, Available at SSRN: https://ssrn.com/abstract=1394402

Karol Szomolányi (Contact Author)

University of Economics in Bratislava - Department of Operations Research and Econometrics ( email )

Dolnozemská cesta 1
Bratislava, 852 35
Slovakia

Kvetoslava Surmanová

University of Economics in Bratislava ( email )

Dolnozemská cesta 1
Bratislava, 852 35
Slovakia

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