Axelrod Meets Cournot: Oligopoly and the Evolutionary Metaphor
AbstractThis paper explores the implication of evolutionary models (replicator dynamics) in a simple Cournot duopoly model. A firm type is a linear decision rule in which the firm's output depends on the other firm's previous output. First we run an Axelrod Tournament between firm types. The champion firm is a near profit-maximizer. Secondly, we allow social evolution to occur using replicator dynamics. Here we find that there are very strong forces leading towards a collusive or near collusive outcome, so long as there is not too much "noise" in the dynamics. Copyright 2002 by Kluwer Academic Publishers
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Bibliographic InfoArticle provided by Society for Computational Economics in its journal Computational Economics.
Volume (Year): 20 (2002)
Issue (Month): 3 (December)
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- Altavilla, Carlo & Luini, Luigi & Sbriglia, Patrizia, 2006.
"Social learning in market games,"
Journal of Economic Behavior & Organization,
Elsevier, vol. 61(4), pages 632-652, December.
- Carlo Altavilla & Luigi Luini & Patrizia Sbriglia, 2005. "Social Learning in Market Games," Labsi Experimental Economics Laboratory University of Siena 003, University of Siena.
- Dixon, Huw D. & Sbriglia, Patrizia & Somma, Ernesto, 2006. "Learning to collude: An experiment in convergence and equilibrium selection in oligopoly," Research in Economics, Elsevier, vol. 60(3), pages 155-167, September.
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