Moving Economic Models from the Chalk Board to the Computer: A Computer-Based Assignment Based on a Dynamic Cournot Model
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.
Volume (Year): 19 (2007)
Issue (Month): 1 ()
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References listed on IDEAS
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- Belsley, David A, 1999.
"Mathematica as an Environment for Doing Economics and Econometrics,"
Society for Computational Economics, vol. 14(1-2), pages 69-87, October.
- David A. Belsley, 1997. "Mathematica as an Environment for doing Economics and Econometrics," Boston College Working Papers in Economics 364, Boston College Department of Economics.
- Hans M. Amman & David A. Kendrick, . "Computational Economics," Online economics textbooks, SUNY-Oswego, Department of Economics, number comp1, March.
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