Download This PaperOn the (In)Stability of Nonlinear Feedback Solutions in a Dynamic Duopoly with Renewable Resource Exploitation
Quaderni - Working Paper DSE N° 1053
13 Pages Posted: 10 Feb 2016
Date Written: February 10, 2016
Abstract
We revisit Fujiwara's (2008) differential duopoly game to show that the degenerate nonlinear feedback identified by the tangency point with the stationary state line is indeed unstable, given the dynamics of the natural resource exploited by firms. To do so, we fully characterise the continuum of nonlinear feedback solution via Rowat's (2007) method, characterising the infinitely many stable nonlinear feedback equilibria.
Keywords: differential games, renewable resources, feedback strategies
JEL Classification: C73, L13, Q2
Suggested Citation: Suggested Citation
Lambertini, Luca and Mantovani, Andrea, On the (In)Stability of Nonlinear Feedback Solutions in a Dynamic Duopoly with Renewable Resource Exploitation (February 10, 2016). Quaderni - Working Paper DSE N° 1053, Available at SSRN: https://ssrn.com/abstract=2730581 or http://dx.doi.org/10.2139/ssrn.2730581
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