Abstract:
The model of market pricing in duopoly describing the prices dynamics as a two-dimensional map is presented. It is shown that the fixed point of the map coincides with the local Nash-equilibrium price in duo-poly game. There have been numerically identified a bifurcation of the fixed point, shown the scheme of transition from periodic to chaotic mode through a doubling period. To ensure the sustainability of local Nash-equilibrium price the controlling chaos mechanism has been proposed. This mechanism allows to harmonize the economic interests of the firms and to form the balanced pricing policy.
Keywords:two-dimensional map, stability of fixed point, bifurcation analysis, price competition, control of market prices, strategic interaction of firms, Nash-equilibrium.
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