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Computational Economics

, Volume 20, Issue 3, pp 139–156 | Cite as

Axelrod Meets Cournot: Oligopoly and the Evolutionary Metaphor

  • Huw David Dixon
  • Steven Wallis
  • Scott Moss
Article

Abstract

This paper explores the implication of evolutionary models (replicatordynamics) in a simple Cournot duopoly model. A firm type is a linear decisionrule in which the firm's output depends on the other firm's previous output.First we run an Axelrod Tournament between firm types. The champion firm isa near profit-maximizer. Secondly, we allow social evolution to occur usingreplicator dynamics. Here we find that there are very strong forces leadingtowards a collusive or near collusive outcome, so long as there is not toomuch `noise' in the dynamics.

evolution Cournot duopoly 

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Copyright information

© Kluwer Academic Publishers 2002

Authors and Affiliations

  • Huw David Dixon
    • 1
  • Steven Wallis
    • 2
  • Scott Moss
    • 2
  1. 1.Economics DepartmentYork UniversityYorkU.K.
  2. 2.Centre for Policy Modelling, Faculty of Management and BusinessManchester Metropolitan UniversityManchesterU.K.

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