Impact of information advantage on dynamics of duopolistic competition under nonlinear demand

Abstract

In this paper, we focus on the impact of one firm’s information advantage over the other on the dynamic behavior of duopolistic competition. We establish conditions for the local stability of the model and find that more information does not necessarily lead to more stability. A bifurcation analysis shows that the Nash equilibrium may lose its stability through period-doubling, Neimark–Sacker, 1:2 resonance, 1:3 resonance, and 1:4 resonance bifurcations. In addition, we explore through numerical simulations complex dynamics such as chaos and multistability that may occur in the model.