STABILITY IN DUOPOLY MODELS

Abstract

In this paper we have examined stability conditions for several versions of the Cournot and Stackelberg duopoly models. We were able to corroborate several standard results under more general conditions as well as arrive at some new conclu-sions.18) Among the latter include the results that the Cournot model can be char-acterized by a stable oscillation and that the Stackelberg leader-leader model is not necessarily unstable. Possibilities for further research include (a) substituting the Kuhn-Tucker theorem for the Lagrangian expressions in the CSM model; 19) (b) in-corporating learning theory into the reaction functions; (c) examining the Bertrand-Edgeworth model; and (d) generalizing the model to n firms.