Study on the damping equilibrium of duopoly strategy output-making based on bounded rationality and knowledge

The most fatal flaw of the classical Cournot oligopoly model as well as the related oligopoly output-making competition model is the supposition on the purpose of game players, which holds that the only game goal is to make the present profit maximum. Based on this supposition, most game model structures are optimal structures. In this article, some new suppositions of duopoly game are established, including the game goal supposition, the time-order supposition and bounded rationality and knowledge supposition. And a description game structure model which has strong universality to the realistic decision-making situations is also constructed. Based on this model, the damping equilibrium of the first decision-maker to resign part of the market share is brought in. This paper also brings forward the concepts of the damping loss and the total damping cost when the first decision-maker completely seizes the whole market and the related algorithms has been designed. At last, four simulation examples for some important propositions and algorithms are presented.