Optimality of Imitative Behavior in Cournot Oligopoly

A. Possajennikov

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Abstract

The paper considers a model of imitation in the context of Cournot oligopoly. Purely imitative behavior can lead to an outcome inconsistent with Nash equilibrium. The question is when we can reconcile imitation with the concept of Nash equilibrium. The paper extends purely imitative behavior in two ways. First, imperfect imitation is introduced. Second, a random matching and local interaction model is analyzed. Such variations in the imitative behavior improve efficiency and restore Nash equilibrium as the likely outcome of the dynamic imitation process.
Original languageEnglish
Place of PublicationTilburg
PublisherMicroeconomics
Number of pages20
Volume1999-02
Publication statusPublished - 1999

Publication series

NameCentER Discussion Paper
Volume1999-02

Keywords

  • Imitation
  • Cournot oligopoly
  • evolutionary games

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