Nonlinear Dynamics

, Volume 81, Issue 1–2, pp 967–979 | Cite as

Nonlinear dynamics and convergence speed of heterogeneous Cournot duopolies involving best response mechanisms with different degrees of rationality

Original Paper


In this paper, we propose and compare three heterogeneous Cournotian duopolies, in which players adopt best response mechanisms based on different degrees of rationality. The economic setting we assume is described by an isoelastic demand function with constant marginal costs. In particular, we study the effect of the rationality degree on stability and convergence speed to the equilibrium output. We study conditions required to converge to the Nash equilibrium and the possible route to destabilization when such conditions are violated, showing that a more elevated degree of rationality of a single player does not always guarantee an improved stability. We show that the considered duopolies exhibit either a flip or a Neimark–Sacker bifurcation. In particular, in heterogeneous oligopolies models, the Neimark–Sacker bifurcation usually arises in the presence of a player adopting gradient-like decisional mechanisms, and not best response heuristic, as shown in the present case. Moreover, we show that the cost ratio crucially influences not only the size of the stability region, but also the speed of convergence toward the equilibrium.


Cournot duopoly game Best response mechanism Bounded rationality Heterogeneous players Bifurcation Complex dynamics 


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Copyright information

© Springer Science+Business Media Dordrecht 2015

Authors and Affiliations

  1. 1.Department of Economics, Management and StatisticsUniversity of Milano-BicoccaMilanItaly

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