Homoclinic connections and subcritical Neimark bifurcation in a duopoly model with adaptively adjusted productions

In this paper we study some global bifurcations arising in the Puu’s oligopoly model when we assume that the producers do not adjust to the best reply but use an adaptive process to obtain at each step the new production. Such bifurcations cause the appearance of a pair of closed invariant curves, one attracting and one repelling, this latter being involved in the subcritical Neimark bifurcation of the Cournot equilibrium point. The aim of the paper is to highlight the relationship between the global bifurcations causing the appearance/disappearance of two invariant closed curves and the homoclinic connections of some saddle cycle, already conjectured in [Agliari A, Gardini L, Puu T. Some global bifurcations related to the appearance of closed invariant curves. Comput Math Simul 2005;68:201–19]. We refine the results obtained in such a paper, showing that the appearance/disappearance of closed invariant curves is not necessarily related to the existence of an attracting cycle. The characterization of the periodicity tongues (i.e. a region of the parameter space in which an attracting cycle exists) associated with a subcritical Neimark bifurcation is also discussed.