Analysis of Triopoly Game with Isoelastic Demand Function and Heterogeneous Players

We analyze a triopoly game model with fully heterogeneous players when the demand function is isoelastic. The three players were considered to be bounded rational, adaptive, and naive. Existing equilibrium points and their locally asymptotic stability conditions are studied. Complexity of the dynamical system is examined by means of numerical simulations, such as period cycles, bifurcation diagrams, strange attractors and sensitive, dependence on initial conditions. This paper extends the result of Tramontana (2010) who considered a heterogeneous duopoly with isoelastic demand function. Comparisons with respect to the heterogeneous triopoly model of Elabbasy et al. (2009) assuming linear demand function are performed.