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Decisions in Economics and Finance

, Volume 41, Issue 2, pp 335–356 | Cite as

Technology choice in an evolutionary oligopoly game

  • Fabio LamantiaEmail author
  • Anghel Negriu
  • Jan Tuinstra
Article
  • 62 Downloads

Abstract

In this paper, we propose and analyze a two-stage oligopoly game in which firms first simultaneously choose production technologies and in the second stage simultaneously choose production quantities. After characterizing the Nash equilibrium of the game, we cast our static model in a dynamic setting exploring the stability properties of the market equilibrium in two different cases: (i) exogenously distributed technologies and Cournot adjustments and (ii) endogenously distributed technologies in an infinite population game with Cournot–Nash equilibrium outputs. The main aim of the paper is that of extending the results about Cournot oligopoly stability in an evolutionary setting of heterogeneous decreasing returns-to-scale technologies. We show how the interplay between production decisions and R&D decisions can generate endogenous market fluctuations leading to complex dynamic phenomena.

Keywords

Oligopoly games Evolutionary dynamics Technology adoption 

JEL Classification

L13 O14 C61 C73 

Notes

Acknowledgements

The authors would like to thank the anonymous Referees for their valuable comments, which highly helped to improve the manuscript. Fabio Lamantia and Jan Tuinstra gratefully acknowledge financial support from EU COST Action IS1104 “The EU in the new economic complex geography: models, tools and policy evaluation”. The research was supported by VŠB-TU Ostrava under the SGS Project SP2018/34.

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Copyright information

© Associazione per la Matematica Applicata alle Scienze Economiche e Sociali (AMASES) 2018

Authors and Affiliations

  1. 1.Department of Economics, Statistics and FinanceUniversity of CalabriaRendeItaly
  2. 2.Faculty of EconomicsVŠB Technical University of OstravaOstravaCzech Republic
  3. 3.CeNDEF and Amsterdam School of EconomicsUniversity of AmsterdamAmsterdamThe Netherlands

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