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Understanding strategic competition using numerical simulations and dynamic diagrams in Mathematica

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  • Pezzino, Mario

Abstract

The paper shows how to use Mathematica to study the properties of strategic competition models. The advantage of this software is that students can see, modify and solve the algebra behind the models. In addition the paper shows how to use the command Manipulate to produce dynamic diagrams and animations. Dynamic diagrams are extremely useful to help students understanding diagrammatic shifts related to comparative statics analysis. Two examples are discussed: the Cournot duopoly and the Hotelling (1929) linear city model.

Suggested Citation

  • Pezzino, Mario, 2016. "Understanding strategic competition using numerical simulations and dynamic diagrams in Mathematica," International Review of Economics Education, Elsevier, vol. 22(C), pages 34-47.
    • Handle: RePEc:eee:ireced:v:22:y:2016:i:c:p:34-47
    DOI: 10.1016/j.iree.2016.03.002
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    References listed on IDEAS

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    1. John Gilbert & Reza Oladi, 2011. "Excel Models for International Trade Theory and Policy: An Online Resource," The Journal of Economic Education, Taylor & Francis Journals, vol. 42(1), pages 95-95, January.
    2. Gorry, Devon & Gilbert, John, 2015. "Numerical simulations of competition in quantities," International Review of Economics Education, Elsevier, vol. 18(C), pages 49-61.
    3. Findley, T. Scott, 2014. "Using MS Excel to solve and simulate the Life-Cycle/Permanent-Income Model of Consumption and Saving," International Review of Economics Education, Elsevier, vol. 16(PB), pages 129-146.
    4. Jean Tirole, 1988. "The Theory of Industrial Organization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262200716, December.
    5. d'Aspremont, C & Gabszewicz, Jean Jaskold & Thisse, J-F, 1979. "On Hotelling's "Stability in Competition"," Econometrica, Econometric Society, vol. 47(5), pages 1145-1150, September.
    6. Nick L. Guo & John Gilbert, 2014. "Demystifying Financial Markets for Saving and Insurance with Numerical Models," The Journal of Economic Education, Taylor & Francis Journals, vol. 45(1), pages 78-78, March.
    7. J. Wilson Mixon, Jr. & Soumaya Tohamy, 2001. "Using Microsoft Excel in Principles of Economics," Computers in Higher Education Economics Review, Economics Network, University of Bristol, vol. 14(2), pages 4-6.
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    Cited by:

    1. Pezzino, Mario, 2018. "Online assessment, adaptive feedback and the importance of visual learning for students. The advantages, with a few caveats, of using MapleTA," International Review of Economics Education, Elsevier, vol. 28(C), pages 11-28.
    2. John Gilbert & Onur A. Koska & Reza Oladi, 2023. "Building and using nonlinear simulations in Excel with an application to the specific factors model," Southern Economic Journal, John Wiley & Sons, vol. 89(4), pages 1242-1265, April.
    3. John Gilbert & Onur A. Koska & Reza Oladi, 2022. "Building and Using Nonlinear Excel Simulations: An Application to the Specific Factors Model," Working Papers in Economics 22/08, University of Canterbury, Department of Economics and Finance.

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    More about this item

    Keywords

    Strategic competition; Dynamic diagrams; Mathematica;
    All these keywords.

    JEL classification:

    • A22 - General Economics and Teaching - - Economic Education and Teaching of Economics - - - Undergraduate
    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection

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