Conjectural Variations and Evolutionary Stability: A Rationale for Consistency

Adopting an evolutionary approach, we explain the conjectural variations firms may hold in duopoly. Given conjectures, firms play the market game rationally. Success in the market game determines fitness in the evolutionary game. Based on linear heterogeneous Cournot and Bertrand competition models, we show that the unique conjectures that are evolutionarily stable are consistent in that they anticipate the rival's behavior correctly.

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Year of publication:	2005
Authors:	Müller, Wieland ; Normann, Hans-Theo
Published in:	Journal of Institutional and Theoretical Economics (JITE). - ISSN 0932-4569. - Vol. 161.2005, 3, p. 491-491

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Type of publication:	Article
Classification:	D43 - Oligopoly and Other Forms of Market Imperfection
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005823405