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The effect of price discrimination on dynamic duopoly games with bounded rationality

  • Qi-Qing Song EMAIL logo , Wei-li Zhang , Yi-Rong Jiang and Juan Geng
Published/Copyright: December 18, 2020

Abstract

In a homogenous product market, customers’ different demand elasticities may lead to different prices. This study examined price discrimination’s effect on equilibrium points in Cournot duopoly games by assuming that each firm charges K prices and adjusts its strategies based on bounded rationality. In consideration of price discrimination, two discrete dynamic game systems with 2K variables were introduced for players with homogenous or heterogenous expectations. The stability of the Nash equilibrium point was found to be independent of price discrimination. Given price discrimination, the stability of boundary stationary points for the system with homogenous players is different from that for the system with heterogenous players. Numerical simulations verified the critical point for the system with homogenous players from being stable to its bifurcation.


Corresponding author: Qi-Qing Song, School of Mathematics and Computer Science, Shanxi Normal University, Linfen 041004, China, E-mail:

Award Identifier / Grant number: 11661030

Award Identifier / Grant number: 2016GXNSFAA380059

Award Identifier / Grant number: 2018GXNSFAA281021

  1. Author contribution: All the authors have accepted responsibility for the entire content of this submitted manuscript and approved submission.

  2. Research funding: This project is supported by National Natural Science Foundation of China (11661030) and Guangxi Natural Science Foundation (2016GXNSFAA380059, 2018GXNSFAA281021).

  3. Conflict of interest statement: The authors declare no conflicts of interest regarding this article.

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Supplementary Material

The online version of this article offers supplementary material (https://doi.org/10.1515/snde-2019-0137).


Received: 2019-11-17
Accepted: 2020-12-05
Published Online: 2020-12-18

© 2020 Walter de Gruyter GmbH, Berlin/Boston

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