Also, they have studied the bounded rationality duopoly game with a simple case when the demand function and the cost function are linear [1].
The model assumes that agents are imperfect conditional cooperators, that they infer unobserved contributions assuming imperfect conditional cooperation by others, and that they have some degree of bounded rationality.
To make the bounded rationality duopoly game more realistic, we assume that the demand function f ( Q ) has the exponential form (see [15]) f ( Q ) = a e − Q = a e − ( q 1 + q 2 ), (3).
But the concept of bounded rationality has always been somewhat ill-defined in just these respects.
But the market is made up of emotionally-charged humans, and humans suffer from bounded rationality.
Recently, many works of bounded rationality duopoly game have been studied [1, 3 11].
By restricting the players' moves and possible strategies, we can study bounded rationality, where an agent has to make rational decisions under conditions of limited information, memory or time.
In the recent years, the study of the bounded rationality duopoly game has attracted a very high attention.
The foregoing modifications to epistemic logic fall broadly within the scope of the subject which has come to be known as bounded rationality – c.f., e.g., (Simon 1957; Simon 1972; Rubinstein 1998; Gigerenzer and Selten 2002; Kahneman 2003).
Therefore the dynamical equation of the bounded rationality player i has the form q i ( t + 1 ) = q i ( t ) + ν i q i ( t ) ∂ Π i ∂ q i ( t ), i = 1, 2, (2).
Lots of papers on "bounded rationality" or "nearly rational" behaviour are now appearing.
