A Nonlinear Duopoly with Efficient Production-Capacity Levels |
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Authors: | Fabio Lamantia |
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Affiliation: | 1.Department of Business Administration,University of Calabria,Rende,Italy |
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Abstract: | In this paper, we propose an oligopoly model where each firm can produce with linear costs up to its “maximum efficient scale”
level and then it incurs quadratic costs for the production exceeding that level. As a consequence, the discrete dynamic model
of firms’ choices over time is expressed by a piecewise-smooth map. For this model, we show how border collision bifurcations
are responsible of the main qualitative changes in the dynamic of the system. In particular, employing specific numerical
examples, we explain the basic mechanism of creation/destruction of periodic points and limit cycles through border crossings
as the parameters of the model are changed. |
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Keywords: | |
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