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Dynamic oligopolies with contingent workforce and investment costs

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  • Merlone, Ugo
  • Szidarovszky, Ferenc

Abstract

Cournot oligopolies are examined with two kinds of output adjustment costs, which model the use of contingent work force and additional investments. The best responses of the firms are first determined and the partial adjustment toward best responses is assumed in formulating a dynamic model. The steady states are first characterized and the dynamic behavior of the output trajectories is demonstrated by computer simulation. With small number of firms and low speeds of adjustments the trajectories converge to a steady state. This convergence is lost with increasing number of firms and/or larger speeds of adjustment giving the possibility of cycles and even chaotic behavior.

Suggested Citation

  • Merlone, Ugo & Szidarovszky, Ferenc, 2015. "Dynamic oligopolies with contingent workforce and investment costs," Mathematics and Computers in Simulation (MATCOM), Elsevier, vol. 108(C), pages 144-154.
    • Handle: RePEc:eee:matcom:v:108:y:2015:i:c:p:144-154
    DOI: 10.1016/j.matcom.2014.02.003
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    References listed on IDEAS

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    Cited by:

    1. Marco Mazzoli & Matteo Morini & Pietro Terna, 2017. "Business Cycle in a Macromodel with Oligopoly and Agents’ Heterogeneity: An Agent-Based Approach," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 3(3), pages 389-417, November.
    2. Akio Matsumoto & Ugo Merlone & Ferenc Szidarovszky, 2017. "Extended oligopolies with contingent workforce," Journal of Evolutionary Economics, Springer, vol. 27(5), pages 989-1005, November.
    3. Merlone, Ugo & Szidarovszky, Ferenc, 2022. "Cournot oligopoly when the competitors operate under capital constraints," Chaos, Solitons & Fractals, Elsevier, vol. 160(C).

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