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Stochastic perturbations for a duopoly Stackelberg model

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  • Tian, Baodan
  • Zhang, Yong
  • Li, Jiamei

Abstract

In this paper, a duopoly Stackelberg model of competition on output with stochastic perturbations is proposed. Sufficient conditions for the existence and the uniqueness of global positive solution of the stochastic system are derived. For the stochastic Stackelberg model (SSM), the authors obtained some sufficient conditions for the globally asymptotical stability of the Nash equilibrium. When ignoring the stochastic perturbations, sufficient criteria for the corresponding deterministic Stackelberg model (DSM) is also obtained. In addition, by applying Milstein’s numerical algorithm, we solve the stochastic differential model then plot the time-series diagram, which can help us deduce the change regulation of the output of two firms in the competition game. Finally, some discussions are given for the economic significance for the model.

Suggested Citation

  • Tian, Baodan & Zhang, Yong & Li, Jiamei, 2020. "Stochastic perturbations for a duopoly Stackelberg model," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 545(C).
    • Handle: RePEc:eee:phsmap:v:545:y:2020:i:c:s0378437119321119
    DOI: 10.1016/j.physa.2019.123792
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    References listed on IDEAS

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    1. Peng, Yu & Lu, Qian & Xiao, Yue & Wu, Xue, 2019. "Complex dynamics analysis for a remanufacturing duopoly model with nonlinear cost," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 514(C), pages 658-670.
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    7. Li, Wei & Chen, Jing, 2018. "Backward integration strategy in a retailer Stackelberg supply chain," Omega, Elsevier, vol. 75(C), pages 118-130.
    8. Peng, Yu & Lu, Qian & Xiao, Yue, 2016. "A dynamic Stackelberg duopoly model with different strategies," Chaos, Solitons & Fractals, Elsevier, vol. 85(C), pages 128-134.
    9. Yang, Xuenan & Peng, Yu & Xiao, Yue & Wu, Xue, 2019. "Nonlinear dynamics of a duopoly Stackelberg game with marginal costs," Chaos, Solitons & Fractals, Elsevier, vol. 123(C), pages 185-191.
    10. Angelini, Natascia & Dieci, Roberto & Nardini, Franco, 2009. "Bifurcation analysis of a dynamic duopoly model with heterogeneous costs and behavioural rules," Mathematics and Computers in Simulation (MATCOM), Elsevier, vol. 79(10), pages 3179-3196.
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