The Evolution of Consistent Conjectures
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Abstract
In this paper we model the evolution of conjectures in an economy consisting of a large number of firms which meet in duopolies. The duopoly game is modelled by the conjectural variation (CV) model. An evolutionary process leads to more profitable conjectures becoming more common (payoff monotone dynamics). Under payoff monotonic dynamics, convergence occurs to a small set of serially undominated strategies containing the consistent onjecture. This set can be made arbitrarily small by appropriate choice f the strategy set. If the game is dominance solvable, then the dynamics converges globally to the unique attractor.Download Info
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Paper provided by Department of Economics, University of York in its series Discussion Papers with number 01/16.
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Handle: RePEc:yor:yorken:01/16
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Postal: Department of Economics and Related Studies, University of York, York, YO10 5DD, United Kingdom
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Related research
Keywords:Other versions of this item:
- Dixon, Huw D. & Somma, Ernesto, 2003. "The evolution of consistent conjectures," Journal of Economic Behavior & Organization, Elsevier, vol. 51(4), pages 523-536, August.
- NEP-ALL-2001-11-21 (All new papers)
- NEP-EVO-2001-11-21 (Evolutionary Economics)
References
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- Boyer, Marcel & Moreaux, Michel, 1983.
"Consistent versus Non-Consistent Conjectures in Doupoly Theory: Some Examples,"
Journal of Industrial Economics,
Wiley Blackwell, vol. 32(1), pages 97-110, September.
- Boyer, M. & Moreaux, M., 1982. "Consistent Versus Non-Consistent Conjectures in Duopoly Theory: Some Examples," Cahiers de recherche 8206, Universite de Montreal, Departement de sciences economiques.
- Cabral, Luis M. B., 1995. "Conjectural variations as a reduced form," Economics Letters, Elsevier, vol. 49(4), pages 397-402, October.
- Lindh, T., 1988.
"The Inconsistency Of Consistent Conjectures: Coming Back To Cournot,"
Papers
1988d, Uppsala - Working Paper Series.
- Lindh, Thomas, 1992. "The inconsistency of consistent conjectures : Coming back to Cournot," Journal of Economic Behavior & Organization, Elsevier, vol. 18(1), pages 69-90, June.
- Bresnahan, Timothy F, 1981. "Duopoly Models with Consistent Conjectures," American Economic Review, American Economic Association, vol. 71(5), pages 934-45, December.
- Dockner, Engelbert J, 1992. "A Dynamic Theory of Conjectural Variations," Journal of Industrial Economics, Wiley Blackwell, vol. 40(4), pages 377-95, December.
- Morton I. Kamien & Nancy L. Schwartz, 1983. "Conjectural Variations," Canadian Journal of Economics, Canadian Economics Association, vol. 16(2), pages 191-211, May.
Citations
Cited by:(explanations, RSS feed, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)
- Nicolas Quérou & Mabel Tidball, 2009. "Consistent Conjectures in a Dynamic Model of Non-renewable Resource Management," Working Papers 09-28, LAMETA, Universtiy of Montpellier, revised Dec 2009.
- Victor Tremblay, 2009. "Introduction: Economic Issues in Sports," Review of Industrial Organization, Springer, vol. 34(1), pages 1-4, February.
- Alex Possajennikov, 2004. "Evolutionary Stability of Constant Consistent Conjectures," Game Theory and Information 0405009, EconWPA.
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