Stability of Cournot duopoly games with isoelastic demands and quadratic costs

Abstract

In this discussion draft, we explore different duopoly games of players with quadratic costs, where the market is supposed to have the isoelastic demand. Different from the usual approaches based on numerical computations, the methods used in the present work are built on symbolic computations, which can produce analytical and rigorous results. Our investigations show that the stability regions are enlarged for the games considered in this work compared to their counterparts with linear costs, which generalizes the classical results of "F. M. Fisher. The stability of the Cournot oligopoly solution: The effects of speeds of adjustment and increasing marginal costs. The Review of Economic Studies, 28(2):125--135, 1961.".