This paper aims at studying local and global dynamics in a nonlinear duopoly with quantity-setting firms and non-cooperative advertising investments that affect the degree of (horizontally) differentiated products. It concentrates on persuasive advertising in a model where each firm has limited information and uses a behavioural rule to set the quantity for the subsequent period. By using some mathematical techniques and numerical simulations, our results show the existence of weak (à la Milnor) attractors, multistability and chaotic dynamics. In the long term, firms may continuously shift from states in which they invest in advertising to states in which advertising investment is absent.
A nonlinear Cournot duopoly with advertising / Gori, Luca; Sodini, Mauro; Fanti, Luciano. - In: CHAOS, SOLITONS AND FRACTALS. - ISSN 0960-0779. - 79:(2015), pp. 178-190. [10.1016/j.chaos.2015.01.022]
A nonlinear Cournot duopoly with advertising
SODINI, MAURO;
2015
Abstract
This paper aims at studying local and global dynamics in a nonlinear duopoly with quantity-setting firms and non-cooperative advertising investments that affect the degree of (horizontally) differentiated products. It concentrates on persuasive advertising in a model where each firm has limited information and uses a behavioural rule to set the quantity for the subsequent period. By using some mathematical techniques and numerical simulations, our results show the existence of weak (à la Milnor) attractors, multistability and chaotic dynamics. In the long term, firms may continuously shift from states in which they invest in advertising to states in which advertising investment is absent.File | Dimensione | Formato | |
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