A game theory approach to the sawnwood and pulpwood markets in the north of Iran

Abstract

Duopoly game theory is applied to the wood industrial markets (sawnwood and pulpwood markets) in the North of Iran. The Nash equilibrium and the dynamic properties of the system based on marginal adjustments are determined. The probability that the Nash equilibrium will be reached is almost zero. The dynamical properties of sawnwood and pulpwood prices derived via the duopoly game model are found also in the real empirical price series.

Keywords

• mixed strategy
• Nash equilibrium
• dynamic duopoly game
• pulpwood prices
• Sawnwood
• Iran