Abstract
We construct a Cournot duopoly model in a continuous-time framework and consider its dynamic behavior when the firms are heterogeneous in determining their output decision: one firm has an information delay in the competitor’s output as well as an implementation delay in its own output while the other firm does not have any delays. Two main results are obtained. One is that the information delay does not affect dynamics of the commodities and the other is that the implementation delay can destabilize the otherwise stable equilibrium. Furthermore, it is numerically confirmed that the two delay duopoly model can generate a wide spectrum of dynamics ranging from cyclic dynamics to chaos.
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