Adjustment Processes in Cournot Duopoly

Interesting explanation of an adjustment process in a Cournot duopoly game is shown in Varian[1]’s textbook, where players adjust their strategies sequentially. It is generally assumed that players adjust simultaneously. We investigate a game that determines whether to adjust or not. First, Nash principle is assumed and as the solution whether sequential or simultaneous is derived. The result depends on the initial state of the output of both firms. In some regions firms adjust simultaneously, and in other regions sequentially. The game under maximin principle is also examined and we compare the results with that of the Nash game.