Chaos Control of an Dynamic Output Game Model

According to the assumption of limited rationality, the dynamic output game model between the two duopoly enterprises is established. There are four fixed points in this model. But three fixed points are unstable and the stability of the other fixed point is related to the marginal cost and output adjustment speed of the two duopoly enterprises. The analytic condition of local stability has been gained through the famous Jury condition. The numerical simulations show that the output adjustment speed has important effects on the local stability region. The bifurcation diagram of outputs versus output adjustment speed shows that the solutions of the model have chaotic behavior. To control chaos, the variable feedback controller is designed. The controller can not only suppress the chaotic state of the outputs, but also freely realize the switch of the outputs among 1-period, 2-period and 4-period through the adjustment of the feedback gain intensity.