Competitive Market Model Research Articles

Output uncertainty mitigation in competitive markets

Output uncertainty is a major concern for industries prone to exogenous, persistent and large fluctuations in output, such as agriculture, wind and solar power generation, while technology adoption aimed at mitigating output uncertainty can improve social welfare. This paper constructs a competitive market model with random output fluctuations to examine the scale of technology adoption at the long-term equilibrium and its comparison with the social optimum. We show that the First Welfare Theorem no longer holds in general, and depending on the characteristics of the demand function, the scale of technology adoption in the competitive market may be greater or less than the socially optimal scale.

The distributional effects of introducing a lottery system in school assignment rule: Evidence from an experiment in Beijing, China

This paper examines the distributional effects of a multi-school districting reform, involving lottery property allocation, on families’ school choice behavior in Beijing, China. Employing a competitive school district housing market model, we investigate the reform's implications on housing prices and school enrollment patterns. Using a unique dataset that combines second-hand housing transaction records and school enrollment data, we document this notable consequence: a substantial 4.57% decrease in housing prices in Haidian District post-reform, resulting in enhanced access to high-quality schools for middle-income families. However, the impact on school choice behavior exhibits structural disparities. While the reform creates opportunities for middle-income families, lower-income families may encounter challenges in accessing public primary schools, where housing prices with improved educational quality have risen by 1.21%. Conversely, affluent families opt for private schools to secure high-quality educational resources, evident in a 4.25% increase in corresponding rent. Additionally, Chinese families prefer proximity to schools to minimize commuting expenses, as reflected in a 0.56% rise in rents near public primary schools. These findings emphasize the importance of addressing both “excessive school choice competition” and the diverse educational preferences of families when implementing school assignment rule reforms in developing countries. Our research expands the literature on primary education and extends concepts for education reform in other developing countries.

Firm Status and Scope: A Dynamic View

This paper extends the traditional transaction cost economics (TCE) perspective by taking account of status differences of transaction participants. Based on the status-based model of market competition proposed by Podolny (1993), I examine how transaction cost advantages or disadvantages originating from status differences affect market participants’ economic incentives and strategic objectives regarding their vertical and horizontal scope decision. I also examine long-term consequences of firms’ decisions and the implications of these consequences for high and low status firms. Considering status differences makes it clear that a considerable conceptual overlap exists between TCE and the resource-based view (RBV).

Імітаційні технології експериментальної економіки

The article presents simulation technologies as an instrumental base for research in experimental economics. The main goals and objectives of modern experimental economics are considered. Attention focused on the study of markets and market structures, as one of the relevant areas of experimentation. A generalized overview of classic simulation models of the market is given. A competitive market model presented on the example of two product variants developed using system-dynamic and agent simulation paradigms on the AnyLogic system software platform. On the basis of the model, a study of user behavior in the market of household electrical products was conducted. The obtained results are illustrated by fragments of model simulation experiments.

Stability, Bifurcation, and Chaos Control of Two-Sided Market Competition

Benefitting from the popular uses of internet technologies, two-sided market has been playing an increasing prominent role in modern times. Users and developers can interact with each other through two-sided platforms. The two-sided market structure has been investigated profoundly. Through building a dynamics two-sided market model with bounded rational, stability conditions of the two-sided market competition system are presented. With the help of bifurcation diagram, Lyapunov exponent, and strange attractor, the stability of the two-sided market competition model is simulated. At last, we use the time-delayed feedback control (TDFC) method to control the chaos. Our main results are as follows: (1) when the adjustment speed of two-sided increases, the system becomes bifurcation, and chaos state happens finally. When the system is stable, the consumer fee is positive while developer fee is negative. (2) When the user externality increases, the stable area of the system increases, and the difference in user externality leads the whole system more stable. When the system is stable, the developer fee decreases. (3) The stable area becomes larger when developer externality increases; when the system is stable, the user fee becomes lower and developer fee becomes higher when developer externality increases. (4) The TDFC method is presented for controlling the chaos; we find that the system becomes more stable under the TDFC method.

Preferences Over Foreign Migration

AbstractDo existing theories regarding the impact of foreign migration explain preferences in non-oecd countries? The author adapts and applies explanations for opposition to migration in the Arabian Gulf, a significant region in global migration today, using a survey experiment implemented in Qatar. The results offer a rare validation of predictions from the labor market competition model, demonstrating that individual employment circumstances are important preference determinants. Additionally, while OECD citizens prefer high-skilled migrants, Qataris are indifferent about blue- versus white-collar workers. Mediation analysis suggests that this null effect is the result of competing cultural and economic concerns over the effect of differing classes of migrants on economic and social welfare. The novel context provides a critical test case of the labor market hypothesis and offers insight into how migration preferences in the Global South differ from the Western experience.

Back-End Electronics Manufacturing Equipment in China and Their Key Components

Electronics manufacturing is a pillar industry of strategic importance for China’s economy. As the supply and ecological chains of global electronics manufacturing industry are currently being reshaped, conducting research on back-end electronics manufacturing equipment and their key components becomes extremely important for the high-quality development of the electronics manufacturing industry in China. This study analyzed the development status and trends of the back-end electronics manufacturing equipment industry in China and abroad and summarized the international technological competition characteristics of the industry, that is, the pursuit of high density and miniaturization of electronic devices as well as high efficiency and low cost in the manufacturing process. The electronics manufacturing equipment industry of China faces problems such as weakness in independent and fundamental technologies, a single market competition model, and severe dependence in imports. Additionally, 12 major technical fields and fundamental contents that China needs to focus on were summarized from the aspects of key processes, core equipment, and components. Empirical analysis was conducted on four typical electronics manufacturing enterprises to summarize their development strategies and experiences. The significance of innovation, key technologies, and market iteration for the development of related enterprises were clarified. Furthermore, corresponding countermeasures for the development of China’s back-end electronics manufacturing equipment and their components were proposed from the aspects of top-level design, industrial layout, market competition, enterprise development, technological innovation, and talent training.

Emergence of distribution system operator in the Indian power sector and possible way ahead

The rapid integration of renewable energy sources and demand-side participation has changed how electrical energy is being purchased, transmitted, distributed, or even consumed. It has opened new opportunities for the Indian power sector to redefine its existing operational and business models to cope with the unique challenges and follow an approach that maximizes social welfare across all energy supply chain segments. This journey will have significant impacts on the Distribution companies (DISCOMs). The anticipated segregation of wire and supply business would bring more operational efficiency in the distribution sector. The subsequent entry of retailers will handle the supply business of electricity. A new entity is likely to emerge as Distribution System Operator (DSO), providing network access, grid services and enabling consumer market participation. The emergence of DSO is decisive in achieving better socioeconomic and environmental benefits. The idea of DSO is still at the conceptual level in India. In this paper, an attempt has been made to present the DSO definition, highlight its need, enlist various DSO functions, and suggest possible DSO creation options. DSO's few competitive market models are examined from the Indian perspective, which will engage all stakeholders actively and ensure the reliable and efficient operation of the overall Indian power grid.

Identification of firms’ beliefs in structural models of market competition

AbstractFirms make decisions under uncertainty and differ in their ability to collect and process information. As a result, in changing environments, firms have heterogeneous beliefs on the behaviour of other firms. This heterogeneity in beliefs can have important implications on market outcomes, efficiency and welfare. This paper studies the identification of firms’ beliefs using their observed actions—a revealed preference and beliefs approach. I consider a general structural model of market competition where firms have incomplete information and their beliefs and profits are nonparametric functions of decisions and state variables. Beliefs may be out of equilibrium. The framework applies both to continuous and discrete choice games and includes as particular cases models of competition in prices or quantities, auction models, entry games and dynamic games of investment decisions. I focus on identification results that exploit an exclusion restriction that naturally appears in models of competition: an observable variable that affects a firm's cost (or revenue) but does not have a direct effect on other firms’ profits. I present identification results under three scenarios—common in empirical industrial organization—on the data available to the researcher.

A model of market competition as a prize contest or a model of strife for market domination

A model of market competition as a prize contest or a model of strife for market domination

Dostępność obszarów wiejskich do miast powiatowych w Polsce transportem publicznym w 2019 r = The 2019 level of accessibility of Poland’s county cities by public transport from rural areas

Spatial accessibility by public transport is an important component of quality of life and an important factor undermining the development of rural areas. It is also a key element of a sustainable mobility system. The capitals of the powiat (county-level tier of administration in Poland) represent the level of the country’s urban hierarchy at which most-important public services are provided. Yet previously only rather few accessibility studies had been carried out, to consider how accessible the rural localities (villages) in the countries different province-regions might be. To fill that gap, the research presented in this paper sought to assess the 2019 level of accessibility via public transport to their own county cities (powiat capitals) that characterized no fewer than 14,271 rural localities in 6 of Poland’s 16 province-regions (i.e. Łódzkie, Kujawsko-Pomorskie, Małopolskie, Pomorskie, Warmińsko-Mazurskie and Zachodniopomorskie). The work also investigated factors shaping this accessibility, with a contribution thereby made to the ongoing debate as to the suitability of the current administrative division of Poland at county (powiat) level. The main findings and principal patterns as regards spatial accessibility could be summarised as follows: a. 1181 (8% of the studied) rural localities, with 215,000 inhabitants overall (or 4% of the rural population) had effectively no access to public transport at all; given that the nearest bus stop/railway station was beyond the acceptable distance of 4 km. b. Province-regions were found to differ markedly in terms of the measured accessibility, with Małopolskie province-region faring much better overall than the others (Figs. 1‑2, 10). c. Nevertheless, internal differentiation in levels of accessibility was greater within province-regions than between them. The best-observed accessibility characterised the environs of larger cities, and especially the Metropolitan Areas of Kraków (Małopolskie), Łódź (Łódzkie) and Gdańsk (Pomorskie), as well as the main transport corridors. Only poor accessibility characterised peripheral areas of most of the counties, while the worst accessibility of all applied in places where powiat-level peripheries were simultaneously peripheries of entire province-regions. d. An important factor determining accessibility was the type and size of rural locality. The larger the village, the better the accessibility (Fig. 19). This also linked up with the way in which size anyway correlated positively with distance to county city. This is to say that villages close to county cities had populations 30‑40% larger than those located on peripheries. e. Size of a county city also correlated positively with that city’s accessibility (Fig. 18). That was especially true of cities with 20,000 or fewer inhabitants. These have less-developed public transport and, as a consequence, far lower accessibility in their environs. Taken together, these patterns sustain a conclusion that the deregulation of public transport in Poland, which took place in the 1990s and ushered in a competitive market model, has had a serious impact on accessibility, ensuring further polarisation and growth in disparities. While better-developed areas (those in which population density is higher and villages larger) continue to furnish enough demand for commercially-viable public transport to be sustained, most of the peripheral, low-population areas are now at risk of transport-related exclusion. In most cases, there is poor public transport in such areas solely because some lines connecting cities or leading to certain tourist destinations remain in place and cross peripheries.

Evolution of dynamics of omni-channel pre-sale and spot competition based on consumer heterogeneity

The paper constructs the pre-sale competition model, the pre-sale and spot hybrid competition model, and the pure spot competition model under the influence of the pre-sale promotion efforts. In the analysis of complete pre-sale competition model, only when the homogeneity of consumers is high, retailers will launch full pre-sale competition. If the pre-sale competition is to be launched, the greater the difference in the response of consumers’ demand to the pre-sale promotion, the higher the requirement for the homogeneity of consumers is. In the hybrid competition model of presale and spot, it is found that the optimal price equilibrium solution to full pre-sale competition is always less than the optimal price equilibrium solution of both pre-sale market and spot market. In the pure spot market competition model, the conditions are given for breaking the hybrid competition equilibrium between pre-sale and spot market, so as to realize the pure spot market competition. Finally, the paper finds the consumer heterogeneity interval optimized by the above three models through numerical analysis. And when heterogeneity of consumers in a medium range, enterprises 1 need more significant effort level to achieve the established earnings rise, on the other hand, when a consumer heterogeneity, within the range of low or high level interval, enterprise 1 only takes significant promotional effort in general level, the rise of yield can be achieved.

An industrial organisation model for the Vietnamese food retail market

Using the case of Vietnam, this paper proposes an industrial organisation model of the food distribution system in developing countries. Since most work in this field has adopted an empirical approach, this paper will instead focus on a theoretical model based on the theory of imperfect competition applied in agricultural economics. We introduce two distribution channels of product differentiation linked vertically by demand, and study the quantity flow from small producers to consumers by means of a Nash equilibrium. We show that there is a Nash equilibrium of the food distribution system and market power, with effects on both farmers and consumers. The paper discusses the implications of these results and proposes policies to intervene in the market and mitigate its power to improve the wealth of both farmers and consumers. The competitive market model of the food distribution system presented in this paper is also important in analysing the policy implications of a food market with imperfect competition in developing countries.

Competition and Entry in Agricultural Markets: Experimental Evidence from Kenya

African agricultural markets are characterized by low farmer revenues and high consumer food prices. Many have worried that this wedge is partially driven by imperfect competition among intermediaries. This paper provides experimental evidence from Kenya on intermediary market structure. Randomized cost shocks and demand subsidies are used to identify a structural model of market competition. Estimates reveal that traders act consistently with joint profit maximization and earn median markups of 39 percent. Exogenously induced firm entry has negligible effects on prices, and low take-up of subsidized entry offers implies large fixed costs. We estimate that traders capture 82 percent of total surplus. (JEL L13, O13, Q11, Q12, Q13)

Теоретико-методологічні підходи до розбудови сучасних систем корпоративного управління на промисловому підприємстві

The article explores different approaches to the concept of "corporate governance", but above all the effective operation of the organizational and communication platform as a tool for the enterprise. Theoretical and methodological approaches to the development of modern corporate governance systems are also considered. The main problems of developing management decision-making mechanisms, corporate governance issues, as well as the impact of corporate governance on investment attractiveness, which is a determining factor in ensuring the investment attractiveness of the company, its ability to adapt to rapid changes in internal and external environment. Analysis of the peculiarities of the institutional environment of corporate interactions in the domestic engineering industry revealed that the new competitive market model increases the interest of private owners of machine-building assets, as well as end users in the efficient operation of industrial enterprises that perform specific infrastructure functions. Today, the study of the functioning of both individual enterprises and industry complexes requires the use of a systematic approach that focuses not only on the enterprise itself, but also on the factors of its environment. In this case, the object of study is not considered as an isolated and independent structure, but as an open socio-economic system.

Evolution Dynamics of Agricultural Internet of Things Technology Promotion and Adoption in China

Internet of Things is the core technology of smart agriculture and can reform and upgrade traditional agriculture for reducing cost, reducing pollution, and increasing productivity and quality in China. From government-led and market economy perspectives, promotion mechanisms and sustainable adoption of agricultural Internet of Things technology are analyzed. In the initial application phase, the promotion of Internet of Things requires government support. For investigating the relationship between the government and farmers, this study builds an evolutionary game model and finds that increases of cost subsidy, farmers’ negative feedback, government’s positive feedback, and chemical agriculture cost can make the model evolve toward the strategy set: farmer adoption and government support. For long-term development, a sustainable model in competitive market is built by competition game and exponential replication equation. This paper analyzes the equilibrium of adoption ratio, long-run profit, and the conversion between equilibrium points under capacity sharing strategy in competitive market. It is also found that the market will eventually evolve to the technology selection strategy whose long-run average profit dominates the market. The innovations are that evolutionary game is used for analyzing the initial stage and competitive game and asynchronous update mechanism are used for analyzing the sustainable development adoption. At last, references are provided for agricultural Internet of Things development policy from the perspectives of initial promotion and long-run sustainability.

ASSESSMENT OF ECONOMIC SECURITY FACTORS OF UKRAINE'S ENERGY MARKET TOWARDS AN INTEGRATED EUROPEAN AREA

The purpose of the article is the evaluation of the economic security factors of Ukraine’s electricity market under conditions of its integration into the European energy area. The implementation of the competitive electricity market model according to the European integration requirements creates transformational challenges for the system of economic interests of energy market participants and their interrelationship. Therefore, the importance of the timely identification and response to economic security factors that may increase the vulnerability of each of the electricity market subjects during the period of structural market adjustment is updated. The research is based on the competitive electricity market model that evolves under the influence of the European integration process. During the course of the present paper, the author has assessed the weight of the economic security factors for Ukraine’s electricity market participants by using an expert evaluation method. Moreover, the statistical method and comparative analysis have been used to investigate the main indicators that reflect the conditions of national electricity markets functioning in the context of economic security were analyzed. In the process of presenting the research results, the authors considered notions of the electricity market and the energy market as fully interchangeable, i.e. synonymous, in order to avoid tautology. In the article, based on the application of the expert evaluation method, subjective and functional structuring of the economic security factors of the Ukrainian energy market was carried out by ranking the weight of their influence on all its participants. The main indicators reflecting the conditions of national electricity markets functioning in the context of economic security were analyzed. Considering the key trends and requirements of the EU energy legislation, the economic security factors were grouped into functional categories, including technical and technological, organizational, informational, financial and economic, fuel and power, environmental, and as well as political and legal factors. Based on the expert evaluation, a map of economic security factors of electricity market participants was formed. It was determined that under conditions of the energy market transformation, organizational factors have the greatest impact on the level of economic security of all its participants. It was found that the most vulnerable among other subjects of the energy market are electricity producers. The scientific novelty of this study is the subject and functional structuring of the economic security factors based on the ranking weight of their impact on all its participants. This provides the possibility to identify and prioritize strategic directions of increasing the level of economic security taking into account the vulnerability of its participants to the manifestation of functional ones. The practical significance of the obtained results is that the structuring of the economic security factors can be used by regulatory authorities in identifying and prioritizing the strategic directions to improve the economic security level of the electricity market in the terms of European integration.

Characteristic Function and Time Consistency for Two-Stage Games with Network Externalities

Time consistency is a property of the solution to a cooperative dynamic game which guarantees that this solution remains stable with respect to its revision by players over time. The fulfillment of this property is directly related to the characteristic function and its behavior with the course of the game as any solution is based on this function. In this paper, we will examine the characteristic functions for two economic models with network externalities represented by a two-stage network game using the theory developed for this class of games. For a network game with positive externalities represented by a public goods provision model, we demonstrate a sufficient condition for time consistency. For a network game with negative externalities represented by a market competition model, we show that the cooperative solution is always time consistent.

Theoretical and methodological approaches to the development of modern corporate management systems at an industrial enterprise

The paper explores different approaches to the concept of "corporate governance" and the operation of the organizational and communication platform as a tool for securing an enterprise’s efficient activity. Theoretical and methodological approaches to the development of modern corporate governance systems are also considered. The paper addresses the main problems of developing the management decision-making mechanisms, corporate governance issues, as well as the impact of corporate governance on investment attractiveness, which is a determining factor in ensuring the investment attractiveness of the company and its ability to adapt to rapid changes in the internal and external environment. Analysis of the peculiarities of the institutional environment of corporate interactions in the domestic engineering industry reveals that the new competitive market model increases the interest of private owners of machine-building assets as well as end users in the efficient operation of industrial enterprises that perform specific infrastructure functions. Today, the study of the functioning of both individual enterprises and industry complexes requires the use of a systematic approach that focuses not only on the enterprise itself but also on the factors of its environment. In this case, the object of study is not considered as an isolated and independent structure, but as an open socio-economic system. In economics, due to the short period of research, there is no holistic theory of corporate governance, therefore, the analysis of theoretical and methodological approaches to the development of corporate governance systems and the definition of institutional opportunities for their application is important and necessary in the domestic industrial complex, in particular at the machine-building enterprises.

Effect Of Population Size On Rural Health Insurance Premiums In The Federal Employees Health Benefits Program.

In the study of health insurance access and affordability in rural areas, a recurring issue is to understand the challenges that programs based upon the competitive market model, such as the Affordable Care Act's Marketplaces, may experience in less populated areas. This article analyzes data for 2013-16 from the Federal Employees Health Benefits Program, focusing on premium and enrollment data for "state-specific" plans-which offer insurance policies and set premiums at the regional level. In nonmetropolitan counties, each additional plan enrollee was associated with a $0.10 lower per capita biweekly premium, whereas this effect was trivial in metropolitan counties. Low health care provider counts were not associated with higher premiums in nonmetropolitan areas, nor was the degree of insurer competition an important predictor of premiums. However, there was substantial correlation over time, which suggests that some variables may be viewed less as sources of premium variation and more as influencing long-term premium levels. These findings suggest that small risk pools may contribute to the challenges faced by private plans in rural areas, in which case risk reinsurance is a potential policy solution.