On the delayed Cournot–Theocharis oligopoly model under adaptive expectations

Abstract

This paper considers the Cournot–Theocharis oligopoly model, where firms make their choices under adaptive expectations. Assuming that the information that each firm has about the outputs of the rest of the competitors in the market is obtained with a time delay, we analyze its impact on the stability of the equilibrium point (Cournot point) of the model. We prove that when the time delay is smaller than four, the region of stability decreases as the time delay increases. We explore the same question for time delays greater than four and conjecture a similar behavior as the one for time delays greater or equal to four. So, the better the information, the more stable the system.