On the Dynamics of Cournot Duopoly Game with Governmental Taxes

Abstract

A quadratic utility function is introduced in this paper to study the dynamic characteristics of Cournot duopoly game. Based on the bounded rationality mechanism, a discrete dynamical map that describes the game’s dynamic is obtained. The map possesses only one equilibrium point which is Nash point. The stability conditions for this point are analyzed. These conditions show that the point becomes unstable due to two bifurcation types that are flip and Neimark–Sacker. The synchronization property for that map is studied. Through local and global analysis, some dynamics of attracting sets are investigated. This analysis gives some insights on the basis of those sets and the shape of the critical curves. It also shows some lobes found in those attracting sets which are constructed due to the origin focal point.