Is the Destabilization of the Cournot Equilibrium a Good Business Strategy in Cournot-Puu Duopoly

摘要

The destabilization of equilibrium points of oligopolies is one of the main topics in Oligopoly Dynamics, and many papers are devoted to study when such a destabilization is exhibited by concrete oligopoly models. The aim of this paper is to analyze in detail this question for a classical duopoly model introduced by Tonu Puu in 1991, and we wonder if such destabilization is positive or negative in terms of firm profits. In particular, we show that, in the case of Cournot-Puu model, the destabilization of the Cournot equilibrium is positive for one of the firms because the average profit is better than that obtained at the equilibrium point. We also make a first approach to the same question when we deal with oligopoly, although with some strong restrictions given by the naive knowledge that we have on the dynamics of Puu's oligopolies.