Nonlinear Dynamics of Cournot Duopoly Game with Social Welfare

This paper explores the idea of cournot duopoly with homogenous expectations in a context of bounded rationality, where two semipublic firms endeavor to maximize the weighted average of social welfare and their own profit. The stability analysis of the fixed points are analyzed and complex dynamic features including period doubling bifurcations of the unique Nash equilibrium is also investigated. Numerical simulations are carried out to show the complex behavior of the models’ parameters. We discuss the possibility of partial privatization of the two firms. We investigate the effects of the government own on the profits and social welfare.