Cooperation in a dynamical adjustment of duopoly game with incomplete information

In the output competition of Cournot game, the adjustment of output is considered under the circumstances that participants have incomplete information. In this paper, two strategies with output’s adjustment are mainly discussed: the tit-for-tat strategy and the tit-for-tat strategy with cooperative intention and their dynamic systems, respectively. The result shows that the tit-for-tat strategy may lead to the cooperation of them, but the stability of adjustment system is sensitive to the parameters; while the tit-for-tat strategy with cooperative intention can make the Pareto Optimality stable within the parameters’ certain scope.