Abstract
The duopoly market research has a long history. Due to such reasons as material supply, product pa-tent right and concession of the government, development of many economic industries is similar to the process of duopoly. In game theory, the Bertrand model which considers price to be a strategic variable is closer to reality and provides the market with more references, especially for retail market and electricity market, as the competitive world develops. Firstly, we analyze the classical Bertrand model and the Nash equilibrium in the model. Secondly, multi-agent technology is applied and the Bertrand duopoly game bidding process is con-ducted; meanwhile, in order to help agents find the optimal solutions, genetic algorithm based on multi-agent Bertrand model is chosen as the main algorithm for the research; and we finish with software im-plementation of the algorithm and with example analysis. In the end, oligopoly market bidding is also modelled in MATLAB simulation, which provides us with more accuracies and flexibilities. It is evidently shown in the model that when none of the two companies are able to meet all the de-mands in the market, the bigger the price gap, the more oscillated it is in the process; thus, the pure stra-tegic Nash equilibrium doesn’t exist. However, when one of the two can offer the demands independent-ly, Nash equilibrium appears and is shown as the calculated results in Bertrand-Edgeworth model where the equilibrium reaches the cost price. Further, the reason for no pure strategic Nash Equilibrium is also discussed.
Highlights
The comparison between price and quantity competition has been extensively discussed in the literature
It is shown in the model that when none of the two companies are able to meet all the demands in the market, the bigger the price gap, the more oscillated it is in the process; the pure strategic Nash equilibrium doesn’t exist
We can deduce the equilibrium of the Bertrand model based on the game theory, but to find it that for companies whose production costs are identical, Bertrand competition leads to zero profit, with the prices set equal to the marginal cost at the equilibrium [9, 10]
Summary
The duopoly market research has a long history Due to such reasons as material supply, product patent right and concession of the government, development of many economic industries is similar to the process of duopoly. Oligopoly market bidding is modelled in MATLAB simulation, which provides us with more accuracies and flexibilities. It is shown in the model that when none of the two companies are able to meet all the demands in the market, the bigger the price gap, the more oscillated it is in the process; the pure strategic Nash equilibrium doesn’t exist.
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callMore From: Bulletin of the South Ural State University series "Economics and management"
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
