Imitators and Optimizers in Cournot Oligopoly

Arbeitspapier

We present a formal model of symmetric n-firm Cournot oligopoly with a heterogeneous population of profit optimizers and imitators. Imitators mimic the output decision of the most successful firms of the previous round a la Vega-Redondo (1997). Optimizers play myopic best response to the opponents' previous output. The dynamics of the decision rules induce a Markov chain. As expression of bounded rationality, firms are allowed to make mistakes and deviate from the decision rules with a small probability. Applying stochastic stability analysis, we characterize the long run behavior of the oligopoly. We find that the long run distribution converges to a recurrent set of states in which imitators are better off than optimizers. This finding appears to be robust even when optimizers are more sophisticated. It suggests that imitators drive optimizers out of the market contradicting a fundamental conjecture by Friedman (1953).

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: Bonn Econ Discussion Papers ; No. 29/2002

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Firm Behavior: Theory ; Noncooperative Games ; Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection ; Oligopoly and Other Imperfect Markets
• Thema: imitation ; myopic best reply ; bounded rationality ; profit maximization hypothesis ; stochastic stability ; learning ; Stackelberg ; Oligopol ; Nichtkooperatives Spiel ; Imitationswettbewerb ; Betriebswirtschaftliches Ziel ; Lernprozess ; Beschränkte Rationalität ; Theorie

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Schipper, Burkhard C.
• Ereignis: Veröffentlichung
• (wer): University of Bonn, Bonn Graduate School of Economics (BGSE)
• (wo): Bonn
• (wann): 2002

Weitere Informationen

• Handle: http://hdl.handle.net/10419/22850
• Letzte Aktualisierung: 10.03.2025, 11:42 MEZ