Analysis of cluster spillovers' impact on the price equilibrium among duopoly Bertrand competition

Science Research Management ›› 2015, Vol. 36 ›› Issue (2) : 145-151.

Long Jianjun, Zhao Hua

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Abstract

Based on the bounded rationality of cluster enterprises, this paper constructs a duopoly Bertrand game model in enterprise cluster with cluster spillovers features, by adopting two different adjustment mechanisms, Navie and GD, this paper also analyzes and discusses the effect of cluster spillovers on equilibrium prices under the discrete dynamical system, and finally carry through the numerical simulation. This research shows that: the evolution track of product prices depends on the values of discrete system parameters, which means the nuances of the initial value in the chaos or bifurcate state can lead to remarkable difference of evolution results; furthermore, increasing cluster spillovers contributes to stabilizing the product prices of the bounded enterprises, preventing the emergence of chaos market and improving the probability to reach Nash Equilibrium..

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bertrand competition / cluster spillovers / enterprise cluster / adjustment mechanism

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Long Jianjun, Zhao Hua. Analysis of cluster spillovers' impact on the price equilibrium among duopoly Bertrand competition[J]. Science Research Management. 2015, 36(2): 145-151

References

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