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

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.   REFERENCES Angelsen, A. 2001. Playing games in the forest: state-local conflicts of land appropriation. Land-Economics 77, 285-299. Aubin, J.P. 1979. Mathematical methods of game and economics theory. North- Holland 10 Game theory approach to sawnwood and pulpwood markets Publishing Company. 619 p. Bertrnad, J. 1883. Review of Walras’s, Théorie Mathématique de la richesse sociale and Cournot’s, Recherches sur les principes mathématiques de la théorie des richesses. Translated into English by James W. Friedman. Cournot oligopoly. Cambridge University Press, 1988, originally published in Journal des Savants. pp. 499- 508. Cournot, A. A. 1838. Recherches sur les principes Mathématiques de la Théorie des Richesses. M. Riviere and Cie. Paris. Researches into the mathematical principles of wealth (English translation). A. M. Kelly, New York. 1960. Flåm, S.D. 1990. Solving non-cooperative game by continuous subgradient projection methods. (Eds. H.J. Sebastian & K. Tammer) System Modelling and Optimization. Lecture notes in control and information sciences 143, 123-155. Flåm, S.D. 1996. Approaches to economic equilibrium. Journal of Economic Dynamics and Control 20, 1505-1522. Flåm, S.D. 1999. Learning equilibrium play: A myopic approach. Computational Optimization and Applications 14, 87-102. Flåm, S.D. 2002. Convexity, differential equations and games. Journal of Convex Analysis 9, 429-438. Flåm, S. D. & Zaccour, G. 1991. Stochastic games, event-adapted equilibria and their Computation. University of Bergen, Department of Economics, Norway. Report 91. Gibbons, R. 1992. Game theory for applied economics. Princeton University Press. pp. 267. Kallio, A.M.I. 2001. Analyzing the Finnish pulpwood market under alternative hypotheses of competition. Canadian Journal of Forest Research 31, 236-245. Lohmander, P. 1997. The constrained probability orbit of mixed strategy games with marginal adjustment: General theory and timber market application. System Analysis - Modelling – Simulation 29, 27-55. Nash, J.F. 1950. The bargaining problem. Econometrica 18, 155-62 Von Stackelberg, H. 1934. Marketform und gleichgewicht. Wien.

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

Sawnwood and pulpwood prices , dynamic duopoly game , Nash equilibrium , mixed strategy