Optimality of Imitative Behavior in Cournot Oligopoly
AbstractThe paper considers a model of imitation in the context of Cournot oligopoly. Purely imitative behavior can lead to an outcome inconsistent with Nash equilibrium. The question is when we can reconcile imitation with the concept of Nash equilibrium. The paper extends purely imitative behavior in two ways. First, imperfect imitation is introduced. Second, a random matching and local interaction model is analyzed. Such variations in the imitative behavior improve efficiency and restore Nash equilibrium as the likely outcome of the dynamic imitation process.
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Bibliographic InfoPaper provided by Tilburg University, Center for Economic Research in its series Discussion Paper with number 1999-02.
Date of creation: 1999
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Imitation; Cournot oligopoly; evolutionary games;
Find related papers by JEL classification:
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
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