Imitators and optimizers in Cournot oligopoly

We analyze a symmetric n-firm Cournot oligopoly with a heterogeneous population of optimizers and imitators. Imitators mimic the output decision of the most successful firms of the previous round A la Vega-Redondo, F., [ 1997. The evolution of Walrasian behavior. Econometrica 65, 375-384]. Optimizers play a myopic best response to the opponents' previous output. Firms make mistakes and deviate from their decision rules with a small probability. Applying stochastic stability analysis, we find that the long run distribution converges to a recurrent set of states in which imitators are better off than are optimizers. (C) 2009 Elsevier B.V. All rights reserved.