Autocratic strategies in Cournot oligopoly game
Masahiko Ueda, Shoma Yagi, Genki Ichinose

TL;DR
This paper demonstrates the existence of zero-determinant strategies in repeated Cournot oligopoly games, revealing their potential to promote collusion and impact market dynamics.
Contribution
It introduces the novel finding that zero-determinant strategies exist in Cournot oligopoly and explores their effects on collusion and market behavior.
Findings
Zero-determinant strategies are found in repeated Cournot games.
Fair zero-determinant strategies can enforce equal payoffs.
These strategies can promote collusion against adaptive learners.
Abstract
An oligopoly is a market in which the price of goods is controlled by a few firms. Cournot introduced the simplest game-theoretic model of oligopoly, where profit-maximizing behavior of each firm results in market failure. Furthermore, when the Cournot oligopoly game is infinitely repeated, firms can tacitly collude to monopolize the market. Such tacit collusion is realized by the same mechanism as direct reciprocity in the repeated prisoner's dilemma game, where mutual cooperation can be realized whereas defection is favorable for both prisoners in a one-shot game. Recently, in the repeated prisoner's dilemma game, a class of strategies called zero-determinant strategies attracts much attention in the context of direct reciprocity. Zero-determinant strategies are autocratic strategies which unilaterally control payoffs of players by enforcing linear relationships between payoffs. There…
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Taxonomy
TopicsGame Theory and Applications · Merger and Competition Analysis · Evolutionary Game Theory and Cooperation
