Chaotic fluctuations in mathematical economics

In this paper we examine a Cournot duopoly model, which expresses the strategic interaction between two firms. We formulate the dynamic adjustment process and investigate the dynamic properties of the stationary point. By introducing a memory mechanism characterized by distributed lag functions, we presuppose that each firm makes production decisions in a cautious manner. This implies that we have to deal with the system of integro-differential equations. By means of numerical simulations we show the occurrence of chaotic fluctuations in the case of fixed delays.