Yasuhito Tanaka

"Evolution to equilibrium in an asymmetric oligopoly with differentiated goods"

JEL codes:
Keywords: asymmetric oligopoly with differentiated goods, finite population ESS, stochastically stable state

Abstract: We present results on finite population evolutionary stable strategies (ESSs) and stochstically stable states for a model of evolution with an imitative rule of strategy choice in an asymmetric oligopoly with differentiated goods and two groups of firms, one group of low cost firms and one of high cost firms. The firms play price setting and quantity setting oligopoly games under linear demand functions. We will show that the stocastically stable state in a price setting oligopoly and that in a quantity setting oligopoly coincide.

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