Chaotic dynamics and chaos control in differentiated Bertrand model with heterogeneous players
Abstract
Purpose
The purpose of this paper is to investigate the chaotic dynamics behaviours and chaos control of differentiated Bertrand model.
Design/methodology/approach
The paper analyzes a nonlinear differentiated Bertrand duopoly game by using the theory of bifurcations of dynamical system, where players have heterogeneous expectations and nonlinear cost function: two types of players are considered – bounded rational and naive expectation. The equilibrium point and local stability of the duopoly game are investigated.
Findings
The paper demonstrates that as some parameters of the game are varied, the stability of Nash equilibrium is lost through period doubling bifurcation. The chaotic features are justified numerically via computing Lyapunov exponents, and sensitive dependence on initial conditions. By using the delay feedback control method, the authors have made the system form chaotic state to stable state.
Originality/value
This paper fulfils an identified need to study the diversity of expectations and how to lead to rich dynamics and complexity.
Keywords
Citation
Hu, R. and Xia, H. (2012), "Chaotic dynamics and chaos control in differentiated Bertrand model with heterogeneous players", Grey Systems: Theory and Application, Vol. 2 No. 2, pp. 129-140. https://doi.org/10.1108/20439371211260108
Publisher
:Emerald Group Publishing Limited
Copyright © 2012, Emerald Group Publishing Limited