Moving Economic Models
from the Chalk Board to
the Computer: A
Computer Based
Assignment Based on a
Dynamic Cournot Model
Tim Kochanski
Portland State University, USA
AAbbssttrraacctt
This paper presents an iterative model, programmed in
Mathematica, which...
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Moving Economic Models
from the Chalk Board to
the Computer: A
Computer Based
Assignment Based on a
Dynamic Cournot Model
Tim Kochanski
Portland State University, USA
AAbbssttrraacctt
This paper presents an iterative model, programmed in
Mathematica, which solves time paths for repeated Cournot
games allowing us to see how output, price, profits, and
market share in the two-firm case change over time when
one firm experiences per turn marginal cost reductions.
By
adjusting the marginal cost reduction rate for one firm and
iterating, students can explore the various solutions and
gain a better understanding of how the variables in the
model diverge over time and the properties of that
divergence.
More generally, students gain experience
designing models and programming in Mathematica and
furthermore develop a deeper understanding of iteration in
simulations.
IInnttrroodduuccttiioonn
The use of Mathematica in economics has been widely
discussed in the literature, both in the context of mo
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