Dynamics analysis and chaos control of a duopoly game with heterogeneous players and output limiter

In actual economies, players sometimes would offer an upper limiter to their output due to capacity constraints, financial constraints and cautious response to uncertainty in the world, or offer a lower limiter to their output due to economies of scale or break-even consideration. In this paper, we discuss a dynamic duopoly game with heterogeneous players by assuming that one of them imposes an upper limiter on output, and the other one imposes a lower limiter. We analyze how the limiter affects the dynamics of output and the performance of players, and explore the number of the equilibrium points and the distribution of conditioned equilibrium points of the model. We then discuss the stable region of conditioned equilibrium. The theoretical results and numerical experiments show that adding appropriate limiter can make the system more robust, and even get rid of its chaos. The numerical results show that chaotic output dynamics can be beneficial to one firm but harmful to the other, and can also be harmful to both of them, and also show that adding appropriate limiter can improve the performance of the player. (C) 2013 Elsevier B.V. All rights reserved.