Imitative and best response behaviors in a nonlinear Cournotian setting

We consider the competition among quantity setting players in a deterministic nonlinear oligopoly framework characterized by an isoelastic demand curve. Players are characterized by having heterogeneous decisional mechanisms to set their outputs: some players are imitators, while the remaining others adopt a rational-like rule according to which their past decisions are adjusted towards their static expectation best response. The Cournot-Nash production level is a stationary state of our model together with a further production level that can be interpreted as the competitive outcome in case only imitators are present. We found that both the number of players and the relative fraction of imitators influence stability of the Cournot-Nash equilibrium with an ambiguous role, and double instability thresholds may be observed. Global analysis shows that a wide variety of complex dynamic scenarios emerge. Chaotic trajectories as well as multi-stabilities, where different attractors coexist, are robust phenomena that can be observed for a wide spectrum of parameter sets.