Conjectural Variations and Evolutionary Stability: A Rationale for Consistency - 10.1628/093245605774259381 - Mohr Siebeck
Economics

Wieland Müller, Hans-Theo Normann

Conjectural Variations and Evolutionary Stability: A Rationale for Consistency

Volume 161 () / Issue 3, pp. 491-502 (12)

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Adopting an evolutionary approach, we explain the conjectural variations firms may hold in duopoly. Given conjectures, firms play the market game rationally. Success in the market game determines fitness in the evolutionary game. Based on linear heterogeneous Cournot and Bertrand competition models, we show that the unique conjectures that are evolutionarily stable are consistent in that they anticipate the rival's behavior correctly.
Authors/Editors

Wieland Müller No current data available.

Hans-Theo Normann No current data available.