Evolutionary game model for a marketing cooperative with penalty for unfaithfulness

Abstract

A game-theoretical model for the behaviour in a marketing cooperative is proposed. For the strategy choice an evolutionary dynamics is introduced. Considering a model with penalty for unfaithfulness and Cournot type market situation, it is shown that, if the penalty is effective then this strategy dynamics drives the players towards an attractive solution, a particular type of Nash equilibrium. A model with redistribution of penalty is also studied. For the symmetric case, on the basis of stability analysis of the strategy dynamics, in terms of the model parameters, sufficient conditions are provided for the strategy choice to converge to a strict Nash equilibrium.