We revisit Fujiwara’s (2008) linear–quadratic differential duopoly game to show that the degenerate nonlinear feedback identified by the tangency point with the stationary state line is indeed unstable, given the dynamics of the natural resource exploited by firms. To do so, we fully characterise the continuum of nonlinear feedback solution via Rowat’s (2007) method, thereby identifying the infinitely many stable nonlinear feedback equilibria. This entails that Rowat’s method can be used in games where each player’s instantaneous payoff depends quadratically on all players’ controls.

Lambertini, L., Mantovani, A. (2016). On the (in)stability of nonlinear feedback solutions in a dynamic duopoly with renewable resource exploitation. ECONOMICS LETTERS, 143, 9-12 [10.1016/j.econlet.2016.03.015].

On the (in)stability of nonlinear feedback solutions in a dynamic duopoly with renewable resource exploitation

LAMBERTINI, LUCA;MANTOVANI, ANDREA
2016

Abstract

We revisit Fujiwara’s (2008) linear–quadratic differential duopoly game to show that the degenerate nonlinear feedback identified by the tangency point with the stationary state line is indeed unstable, given the dynamics of the natural resource exploited by firms. To do so, we fully characterise the continuum of nonlinear feedback solution via Rowat’s (2007) method, thereby identifying the infinitely many stable nonlinear feedback equilibria. This entails that Rowat’s method can be used in games where each player’s instantaneous payoff depends quadratically on all players’ controls.
2016
Lambertini, L., Mantovani, A. (2016). On the (in)stability of nonlinear feedback solutions in a dynamic duopoly with renewable resource exploitation. ECONOMICS LETTERS, 143, 9-12 [10.1016/j.econlet.2016.03.015].
Lambertini, L.; Mantovani, A.
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11585/543994
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