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Moving Economic Models from the Chalk Board to the Computer: A Computer-Based Assignment Based on a Dynamic Cournot Model

Author

Listed:
  • Tim Kochanski

    (Portland State University)

Abstract

This paper presents an iterative model, programmed in Mathematica, which solves time paths for repeated Cournot games allowing us to see how output, price, profits, and market share in the two-firm case change over time when one firm experiences per turn marginal cost reductions. By adjusting the marginal cost reduction rate for one firm and iterating, students can explore the various solutions and gain a better understanding of how the variables in the model diverge over time and the properties of that divergence. More generally, students gain experience designing models and programming in Mathematica and furthermore develop a deeper understanding of iteration in simulations.

Suggested Citation

  • Tim Kochanski, 2007. "Moving Economic Models from the Chalk Board to the Computer: A Computer-Based Assignment Based on a Dynamic Cournot Model," Computers in Higher Education Economics Review, Economics Network, University of Bristol, vol. 19(1), pages 24-32.
    • Handle: RePEc:che:chepap:v:19:y:2007:i:1:p:24-32
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    File URL: https://www.economicsnetwork.ac.uk/cheer/ch19/kochanski.pdf
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    References listed on IDEAS

    as
    1. Belsley, David A, 1999. "Mathematica as an Environment for Doing Economics and Econometrics," Computational Economics, Springer;Society for Computational Economics, vol. 14(1-2), pages 69-87, October.
    2. Hans M. Amman & David A. Kendrick, . "Computational Economics," Online economics textbooks, SUNY-Oswego, Department of Economics, number comp1, December.
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    Cited by:

    1. Tim Kochanski, 2012. "Toward Teaching Markets as Complex Systems: A Web Based Simulation Assignment Implemented in Netlogo," International Review of Economic Education, Economics Network, University of Bristol, vol. 11(2), pages 102-114.

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