Journal
MATHEMATICS
Volume 9, Issue 20, Pages -Publisher
MDPI
DOI: 10.3390/math9202558
Keywords
small piecewise smooth; Bertrand game; stability; bifurcation
Categories
Funding
- King Saud University
Ask authors/readers for more resources
This paper examines a Bertrand competition between two firms using a quadratic utility function, where one produces new products and the other re-manufactures returned products. By applying a gradient adjustment mechanism, a two-dimensional piecewise smooth discrete dynamic map is constructed to study the dynamic characteristics of the game. Global analysis reveals the presence of closed invariant curves, periodic cycles, and chaotic attractors.
This paper considers a Bertrand competition between two firms whose decision variables are derived from a quadratic utility function. The first firm produces new products with their own prices while the second firm re-manufactures returned products and sells them in the market at prices that may be less than or equal to the price of the first firm. Dynamically, this competition is constructed on which boundedly rational firms apply a gradient adjustment mechanism to update their prices in each period. According to this mechanism and the nature of the competition, a two-dimensional piecewise smooth discrete dynamic map was constructed in order to study the complex dynamic characteristics of the game. The phase plane of the map was divided into two different regions, separated by border curve. The equilibrium points of the map, in each region on where they are defined, were calculated, and their stability conditions were investigated. Furthermore, we conducted a global analysis to investigate the complex structure of the map, such as closed invariant curves, periodic cycles, and chaotic attractors and their basins, which cause qualitative changes as some parameters are allowed to vary.
Authors
I am an author on this paper
Click your name to claim this paper and add it to your profile.
Reviews
Recommended
No Data Available