Abstract
An oligopoly market with a Stackelberg leader (leaders) and the reflexive behavior of market participants (agents) is considered; for this market, the problem of determining equilibria in the case of incoincident reflexion ranks and different marginal and constant costs of agents is studied. A reflexive game model for a duopoly market is developed and formulas for calculating informational equilibria under incoincident reflexion ranks and different marginal and constant costs of agents are obtained. As is demonstrated below, the advanced (lagged) reflexion of one agent compared to the counteragent affects the intensity of competition in the oligopoly market, making non-uniform the payoff distribution between the agents in favor of the reflexive leader.
Similar content being viewed by others
References
Mas-Collel, A., Whinston, M., and Green, J., Microeconomic Theory, New York: Oxford Univer. Press, 1995.
Shapiro, C., Theories of Oligopoly Behavior, Discussion paper 126, Woodrow Wilson School, Princeton: Princeton Univer. Press, 1987.
Nash, J., Non-cooperative Games, Ann. Math., 1951, no. 54, pp. 286–295.
Cournot, A.A., Researches into the Mathematical Principles of the Theory of Wealth, London: Hafner, 1960.
Bowley, A.L., The Mathematical Groundwork of Economics, Oxford: Oxford Univers. Press, 1924.
Stackelberg, H., Market Structure and Equilibrium, Berlin: Springer-Verlag, 2011, 1st ed.
Karmarkar, U.S. and Rajaram, K., Aggregate Production Planning for Process Industries under Oligopolistic Competition, Eur. J. Oper. Res., 2012, no. 223 (3), pp. 680–689.
Ledvina, A. and Sigar, R., Oligopoly Games under Asymmetric Costs and an Application to Energy Production, Math. Financ. Econom., 2012, no. 6 (4), pp. 261–293.
Currarini, S. and Marini, M.A., Sequential Play and Cartel Stability in Cournot Oligopoly, Appl. Math. Sci., 2013, no. 7 (1–4), pp. 197–200.
Vasin, A., Game-Theoretic Study of Electricity Market Mechanisms, Procedia Comput. Sci., 2014, no. 31, pp. 124–132.
Sun, F., Liu, B., Hou, F., Gui, L., and Chen, J., Cournot Equilibrium in the Mobile Virtual Network Operator Oriented Oligopoly Offloading Market, Proc. 2016 IEEE Int. Conf. Commun. (ICC 2016), 2016, no. 7511340.
Lorenczik, S. and Panke, T., Assessing Market Structures in Resource Markets—An Empirical Analysis of the Market for Metallurgical Coal Using Various Equilibrium Models, Energy Econom., 2016, no. 59, pp. 179–187.
Li, X., Xu, X., and Sun, Y., Advance Selling Strategies for Oligopolists by Considering Product Diffusion Effect, Kybernet., 2016, no. 45 (5), pp. 744–759.
Naimzada, A.K. and Sbragia, L., Oligopoly Games with Nonlinear Demand and Cost Functions: Two Boundedly Rational Adjustment Processes, Chaos, Solit. Fractal., 2006, no. 29 (3), pp. 707–722.
Askar, S. and Alnowibet, K., Nonlinear Oligopolistic Game with Isoelastic Demand Function: Rationality and Local Monopolistic Approximation, Chaos, Solit. Fractal., 2016, no. 84, pp. 15–22.
Naimzada, A. and Tramontana, F., Two Different Routes to Complex Dynamics in a Heterogeneous Triopoly Game, J. Differ. Equat. Appl., 2015, no. 21 (7), pp. 553–563.
Cavalli, F., Naimzada, A., and Tramontana, F., Nonlinear Dynamics and Global Analysis of a Geterogeneous Cournot Duopoly with a Local Monopolistic Approach Versus a Gradient Rule with Endogenous Reactivity, Commun. Nonlin. Sci. Numer. Simulat., 2015, no. 23 (1–3), pp. 245–262.
Kalashnikov, V.V., Bulavsky, V.A., and Kalashnykova, N.I., Existence of the Nash-Optimal Strategies in the Meta-Game, Studies Syst., Decision Control, 2018, no. 100, pp. 95–100.
Colacicco, R., Ten Years of General Oligopolistic Equilibrium: A Survey, J. Econom. Surveys, 2015, no. 29 (5), pp. 965–992.
Jørgensen, S. and Zaccour, G., A Survey of Game-Theoretic Models of Cooperative Advertising, Eur. J. Oper. Res., 2014, vol. 237 (1), pp. 1–14.
Ino, H. and Matsumura, T., Welfare-Improving Effect of a Small Number of Followers in a Stackelberg Model, B.E. J. Theoret. Econom., 2016, no. 16 (1), pp. 243–265.
Peng, Y., Lu, Q., and Xiao, Y., A Dynamic Stackelberg Duopoly Model with Different Strategies, Chaos, Solitons Fractals, 2016, vol. 85, pp. 128–134.
Hayakawa, H., The Tragedy of the Commons: The Logic of Entry and the Dynamic Process under Two Scenarios, Eurasian Econom. Rev., 2017, no. 7 (3), pp. 311–328.
Yoo, T.-H., Ko, W., Rhee, C.-H., and Park, J.-K., The Incentive Announcement Effect of Demand Response on Market Power Mitigation in the Electricity Market, Renewable Sustainable Energy Rev., 2017, no. 76, pp. 545–554.
Sherali, H.D., Multiple Leader Stackelberg Model and Analysis, Oper. Res., 1984, no. 32 (2), pp. 390–404.
Boyer, M. and Moreaux, M., Being a Leader or a Follower. Reflections on the Distribution of Roles in Duopoly, Int. J. Industr. Organ., 1987, no. 5 (2), pp. 175–192.
DeMiguel, V. and Xu, H., A Stochastic Multiple-leader Stackelberg Model: Analysis, Computation, and Application, Oper. Res., 2009, no. 57 (5), pp. 1220–1235.
Julien, L.A., On Noncooperative Oligopoly Equilibrium in the Multiple Leader—Follower Game, Eur. J. Oper. Res., 2017, no. 256 (2), pp. 650–662.
Solis, C.U., Clempner, J.B., and Poznyak, A.S., Modeling Multileader — Follower Noncooperative Stackelberg Games, Cybernet. Syst., 2017, no. 47 (8), pp. 650–673.
Lefevbre, V.A., About Self-Organizing and Self-Reflexive Systems and Their Study, Tr. konf. “Problemy issledovaniya sistem i struktur” (Proc. Conf. “Problems of Studying Systems and Structures”), Moscow: Akad. Nauk SSSR, 1965, pp. 61–68.
Lefebvre, V., Reflexive Analysis of Groups, in Computational Methods for Counterterrorism, Berlin: Springer-Verlag, 2009, pp. 173–210.
Lefebvre, V., Lectures on the Reflexive Games Theory, New York: Leaf & Oaks, 2010.
Rgo, L. and Halpern, J., Generalized Solution Concepts in Games with Possibly Unaware Players, Int. J. Game Theory, 2012, no. 41, pp. 131–155.
Heifetz, A., Meier, M., and Schipper, B.C., Unawareness, Beliefs, and Speculative Trade, Games Econom. Behavior, 2013, no. 77 (1), pp. 100–121.
Alaoui, L. and Penta, A., Endogenous Depth of Reasoning, Rev. Econom. Studies, 2016, no. 83 (4), pp. 1297–1333.
Kneeland, T., Coordination under Limited Depth of Reasoning, Games Econom. Behavior, 2016, no. 96, pp. 49–64.
Brocas, I., Carrillo, J.D., Wang, W., and Camerer, C.F., Imperfect Choice or Imperfect Attention? Understanding Strategic Thinking in Private Information Games, Rev. Econom. Studies, 2014, no. 81 (3), pp. 944–970.
Crawford, V.P., Costa-Gomes, M.A., and Iriberri, N., Structural Models of Nonequilibrium Strategic Thinking: Theory, Evidence, and Applications, J. Econom. Literat., 2013, no. 51 (1), pp. 5–62.
Fellner, W., Competition among the Few, New York: Alfred A. Knopf, 1949.
Korepanov, V.O. and Novikov, D.A., The Reflexive Partitions Method in Models of Collective Behavior and Control, Autom. Remote Control, 2012, vol. 73, no. 8, pp. 1424–1441.
Chkhartishvili, A.G., Reflexive Games: Transformation of Awareness Structure, Autom. Remote Control, 2010, vol. 71, no. 6, pp. 1208–1216.
Novikov, D.A. and Chkhartishvili, A.G., Mathematical Models of Informational and Strategic Reflexion: a Survey, Advances Syst. Sci. Appl., 2014, no. 3, pp. 254–277.
Chkhartishvili, A.G. and Korepanov, V.O., Adding Informational Beliefs to the Players Strategic Thinking Model, IFAC-PapersOnLine, 2016, no. 49 (32), pp. 19–23.
Algazin, G.I. and Algazina, D.G., Informational Equilibrium in a Dynamic Model of Collective Behavior in a Competitive Market, Upravlen. Bol’sh. Sist., 2016, no. 64, pp. 112–136.
Liu, Y., Gao, L., and Guan, J., Marketing Strategy of Price Competition and Product Differentiation in Duopoly Enterprises with Asymmetric Information, Proc. Int. Conf. on Service Systems and Service Management (ICSSSM’05), 2005, no. 1 (1499557), pp. 665–668.
Gilpatric, S.M. and Li, Y., Information Value under Demand Uncertainty and Endogenous Market Leadership, Econom. Inquiry, 2015, no. 53 (1), pp. 589–603.
Filatov, A.Yu., Heterogeneous Behavior of Firms on an Oligopoly Market: Strategic Firms and Price Takers, Izv. Irk. Gos. Univ. Mat., 2015, vol. 13, pp. 72–83.
Geraskin, M.I. and Chkhartishvili, A.G., Structural Modeling of Oligopoly Market under the Nonlinear Functions of Demand and Agents’ Costs, Autom. Remote Control, 2017, vol. 78, no. 2, pp. 332–348.
Geraskin, M.I. and Chkhartishvili, A.G., Game-Theoretic Models of an Oligopoly Market with Nonlinear Agent Cost Functions, Autom. Remote Control, 2017, vol. 78, no. 9, pp. 1631–1650.
Geraskin, M.I., Modeling Reflexion in the Non-Linear Model of the Stakelberg Three-Agent Oligopoly for the Russian Telecommunication Market, Autom. Remote Control, 2018, vol. 79, no. 5, pp. 841–859.
Geraskin, M.I., Game-Theoretic Analysis of Stackelberg Oligopoly with Arbitrary Rank Reflexive Behavior of Agents, Kybernet., 2017, no. 46 (6), pp. 1052–1067.
Bresnahan, T., Duopoly Models with Consistent Conjectures, Am. Econom. Rev., 1981, vol 71 (5), pp. 934–945.
Geraskin, M.I. and Biryukova, I.A., Analysis of a Reflexive Game of Agents on a Telecommunications Market in the Case of Two Reflexing Agents, Aktual’n. Probl. Ekon. Prav., 2018, vol. 12 (3), pp. 468–480.
Novikov, D.A. and Chkhartishvili, A.G., Reflexion and Control: Mathematical Models, London: CRC Press, 2014.
Intriligator, M.D., Mathematical Optimization and Economic Theory, New Jersey: Prentice Hall, 1971.
Balash, V., Sidorov, S., and Faizliev, A., Analysis of News Flow Dynamics Based on the Company Co-mention Network Characteristics, Stud. Comput. Intelligence, 2019, no. 813, pp. 521–533.
Sidorov, S.P., Faizliev, A.R., and Balash, V.A., A Long Memory Property of Economic and Financial News Flows, Int. J. Data Analysis Techniques Strategies, 2018, no. 10 (4), pp. 406–420.
Author information
Authors and Affiliations
Corresponding author
Additional information
This paper was recommended for publication by D.A. Novikov, a member of the Editorial Board
Russian Text © The Author(s), 2020, published in Avtomatika i Telemekhanika, 2020, No. 2, pp. 134–156.
Rights and permissions
About this article
Cite this article
Geraskin, M.I. Reflexive Games in the Linear Stackelberg Duopoly Models under Incoincident Reflexion Ranks. Autom Remote Control 81, 302–319 (2020). https://doi.org/10.1134/S0005117920020095
Received:
Revised:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1134/S0005117920020095