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Topological chaos in oligopoly competition

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  • Li, Xiaoliang
  • Zhang, Ally Quan

Abstract

This letter demonstrates that oligopoly competition can exhibit topological chaos by applying Mitra’s sufficient condition. To overcome the computational challenges arising from the lack of a simple closed-form expression for the modal point, we develop a resultant-based method. Our results show that, for a sufficiently large number of firms, there must exist parameter values that guarantee topological chaos.

Suggested Citation

  • Li, Xiaoliang & Zhang, Ally Quan, 2025. "Topological chaos in oligopoly competition," Economics Letters, Elsevier, vol. 252(C).
    • Handle: RePEc:eee:ecolet:v:252:y:2025:i:c:s0165176525001673
    DOI: 10.1016/j.econlet.2025.112330
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    References listed on IDEAS

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    1. Matsuyama, Kiminori, 2001. "Growing through Cycles in an Infinitely Lived Agent Economy," Journal of Economic Theory, Elsevier, vol. 100(2), pages 220-234, October.
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    5. Kiminori Matsuyama, 1999. "Growing Through Cycles," Econometrica, Econometric Society, vol. 67(2), pages 335-348, March.
    6. Bischi, Gian Italo & Naimzada, Ahmad K. & Sbragia, Lucia, 2007. "Oligopoly games with Local Monopolistic Approximation," Journal of Economic Behavior & Organization, Elsevier, vol. 62(3), pages 371-388, March.
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    Keywords

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    JEL classification:

    • C60 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - General
    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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