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Chinese Journal of Management Science ›› 2006, Vol. ›› Issue (5): 114-120.

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Study on the Nash Equilibrium of Duopoly Strategy Output-Making Based on Bounded Knowledge and Bounded Rationality

FANG Zhi-geng, LIU Si-feng, LI Yuan-nian, CUI Jiang-tao   

  1. School of Economics and Management, Nanjing University of Aeronautics and Astronautics, Nanjing 210016, China
  • Received:2006-04-30 Revised:2006-08-31 Online:2006-10-28 Published:2012-03-07

Abstract: The most fatal flaw of the classic Cournot oligarch model and the related oligarch output-making competition model at present is that the assumption for the goal of oligarch,the assumption for time-order and the assumption for bounded rationality and bounded knowledge are all badly different from reality.In this paper,according to the new game condition assumption,a descriptive game structure model is constructed which has a stronger adjustability to practical decision-making conditions.This model can make a perfect description for the strategy output-making decision-making problem which has the first-knowing game player between the leading manufacturer and the subordinate manufacturer in reality.And it has been proved that the classic Cournot game model is a case of this model.On the basis of the above mentioned,in this paper it is proved that competition strategy is a kind of Nash equilibrium of duopoly output-making competition based on strategy benefit,and also the accumulation point equilibrium of duopoly strategy adjusting is found.Further more,the damping Nash equilibrium of the first decision-making oligarch which contains strategy expanded damping conditions is discovered,and the con structive demonstration and simulation example are also given in the paper.

Key words: duopoly, bounded rationality, bounded knowledge, strategy output-making, damping Nash equilibrium

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