GLOBAL BIFURCATIONS OF BASINS IN A TRIOPOLY GAME

Abstract

A Cournot model based on bounded inverse demand function and constant marginal production costs is studied. The case of three producers is considered and the adjustment process reduces to a three-dimensional noninvertible map in the output of competitors. The analysis of the dynamical behavior of the map is performed by the "critical curve method", extended to the critical surfaces in 3D. By this method, we explain the different bifurcations in the basins of attraction and in the attracting sets. In particular, given the economic application, feasible trajectories are focused, starting from the simple situation of two identical producers and extending the results to the generic case.