Model Of Dynamic Competition Research Articles

Dynamic Price Competition, Briefly Sunk Costs, and Entry Deterrence

This article examines how the threat of entry constrains pricing behavior in a natural monopoly with briefly sunk costs. In the model of dynamic price competition explored here, costs are too briefly sunk to confer any strategic advantage to incumbency. Despite the lack of advantage to incumbency, the threat of entry exerts little discipline on prices. In the presence of a slight cost asymmetry, monopoly for the lower-cost firm is the unique equilibrium, regardless of which firm is initially the incumbent.

Modeling competition for light between soybean and broadleaf weeds

Crop yield reductions due to weed competition can vary with both environmental and cultural conditions. Models of resource use by crops and weeds will likely be necessary to accurately simulate crop losses from weed competition. Many broadleaf weeds cause losses in soybean ( Glycine max (L.) Merr.) through competition for light. A simple model of canopy structure and light interception by soybean and broadleaf weeds within a weed area of influence has been developed and incorporated into SOYWEED, a dynamic soybean-weed competition model. Daily photosynthetic rates per unit ground area are calculated according to interception of direct light by the weed and crop. Interception is approximated from the simple exponential extinction of light by a plant canopy. For competing plants, interception depends on both the amount and arrangement of leaf area. Arrangement of that leaf area is described by extinction coefficients, the plant height, and the vertical distribution of leaf area. Preliminary testing with cocklebur ( Xanthium strumarium L.) competition data indicates an improved simulation of weed and crop growth and crop yield with the incorporation of this model into SOYWEED, but highlights the lack of data on weed and soybean canopy structure. Simulated crop response to changes in weed emergence date and time before weed removal is consistent with general observations reported in the literature. Simulation results indicate that several weed canopy characteristics may contribute to the differential ability of weed species to compete with soybean.

CHAOTIC PATTERNS IN COURNOT COMPETITION

ABSTRACTChaos theory offers a new mode of analyzing the complexity of nonlinear (economic) dynamics. A growing list of applications is mainly focused on modeling macroeconomic (growth and business) cycles and dynamic (consumer's and firms') choice. This paper provides a nonlinear dynamic model of Cournot competition. The model improves upon Rand (1978) and Dana and Montrucchio (1986) by permitting monopoly output to be positive. The existence of chaotic regimes is proven and simulation experiments illustrate the implications.

An Analysis of Competitive Oscillations between Japanese Twin Cities

In this paper keenly-competing Japanese twin cities are examined and the competitive oscillations occurring between them is analyzed as a typical example of medium-term competitive processes. From an analysis of market shares for annual retail sales of women's and children's clothes it was found that there are certain oscillations between the twin cities. As these oscillations are derived from the strong competition between closely-located twin cities, they are called competitive oscillations. In order to analyze the generation of the competitive oscillations, an attempt to reproduce a strongly competitive condition by constructing a dynamic model of two-centre competition was made. As the twin cities share a large part of their populations, they are under strong competitive conditions in which major retail development at one city produces an absolute loss to the other city. Therefore, the twin cities seesaw through the introduction of innovations such as large shops in order to gain a more advantageous competitive position, resulting in competitive oscillations between them. This finding implies that the introduction of innovation to centres is a competitive device in the medium-term and is consistent with the view that the diffusion of innovation is closely related to the competitive process.

An overlapping generations model of electoral competition

This paper presents a dynamic model of political competition between two parties with different policy preferences. A is explicitly modeled as a sequence of of candidates, all of whom face finite decision horizons. In general, there is a conflict between the interests of the individual policymakers and those of the , which includes subsequent of candidates. We characterize this conflict and suggest a scheme of intergenerational transfers within the party which can resolve or mitigate this conflict. The paper shows how the overlapping generations model can be usefully applied to the political arena.

An Empirical Analysis of Dynamic, Nonprice Competition in an Oligopolistic Industry

This article develops a dynamic model of nonprice competition in an oligopolistic industry and uses it to analyze advertising competition in the U.S. cigarette industry. The model generalizes existing studies by allowing advertising to affect both firm market shares and the total size of the market. The model also allows dynamic conjectural variations to arise from the intertemporal links created by the durability of advertising. We use these dynamic conjectural variations to distinguish alternative models of competitive interaction. We estimate the complete model of firm production, demand, and advertising choice by using data for U.S. cigarette producers. The results indicate that firm advertising primarily affects the level of market demand, with a firm's effect on rival firms' market shares arising through variations in the number of brands sold. Empirical results on firm behavior suggest that firms act as if their advertising choices will alter the future advertising choices of rival firms in both the high-tar and low-tar cigarette markets.

Stability analysis for profit-responsive selection mechanisms

Industrial organization economists commonly regard realized profit as a test of the viability of production techniques. The concept of a profit-responsive selection mechanism id defined for a dynamic model of competition among techniques. For a class of symmetrie economic environments, an auxiliary function is presented whose maxima correspond to the stable equilibria of the original dynamic system. Given knowledge of the relevant technology, and exogenous supply and demand conditions, stability analysis can be carried out using this auxiliary function, without imposing any additional restrictions on the selection mechanism beyond the weak property of profit-responsiveness.

Policy Motivation and Party Differences in a Dynamic Spatial Model of Party Competition

We present a model of party competition that produces more realistic patterns of results than those often emphasized in the literature. Reversing Downs (1957), we assume that parties win elections in order to formulate policies, rather than formulate policies in order to win elections. Voters are modeled first as having perfect information about candidate positions, and then under conditions of uncertainty. In simulation experiments we show that policy motivation and voter uncertainty can bring about persistent and predictable party differences in sequential majority rule elections. As the degree of voter certainty decreases, parties diverge towards their optima, whereas increases in voter certainty draw parties towards cycles in which party positions vary, but predictable issue stances are maintained on the average.

International competition in R&D and technological leadership: An examination of the Posner-Hufbauer hypothesis

This paper develops a dynamic game-theoretic model of international competition in R&D to examine the Posner-Hufbauer hypothesis that trade based on the generation and diffusion of superior technology is relatively disadvantageous to the technologically less advanced countries. The impact of three forms of technological leadership (technological endowments, costs of R&D, and preemptive behavior) on the outcome of the game provides some support for the hypothesis. If the quasi-rent period is sufficiently long and if the original technological follower reacts aggressively to increased R&D rivalry, the leader and the follower will switch positions in the later part of the game.

Technological learning, technological substitution, and technological change

From a simple dynamic model of competition between product lines it is shown that the shape of learning curves has a powerful influence on the dynamics of technological substitution. Learning of both production efficiency and marketing efficiency is considered. It is asserted that both types of learning are important and that the two are complementary. It is further speculated that production learning is probably more important for commodities and in situations of low per capita income, whereas market learning gains ascendancy in cases of high income and specialized and diversified product lines. In closing, it is noted that simple competitive models are misleading, first because complementarities and coevolutionary processes are probably as important in the overall development of technology as are competitive processes, and second because optimization of the technological system's parts does not guarantee improvement of the performance of the system as a whole.

An Analytical Investigation of Kotler's Competitive Simulation Model

Kotler's well-known dynamic competitive simulation model is investigated by means of analytical methods. Unlike the simulation studies run by Kotler the analytical investigation reveals (1) that the model produces changes in price elasticity over time, which do not appear economically plausible, and (2) that the representation of competitive relations is highly questionable. It is shown that these properties of the model lead to consequences for the optimal pricing and promotion strategy which can hardly be considered as reasonable: Both the optimal prices and the optimal promotion efforts increase continuously over time and—within a certain period of time—the optimal prices under competitive conditions are greater than the respective prices under monopolistic conditions.

Model Simulation of Interspecific Competition between Two Plant Species in Relation to Light Environment

Interspecific competition between plant species has long been interesting subjects among agriculturalists who have studied mixed culture of crops, range management, weed control and so on. But it is very difficult to explain the whole results about plant growth in mixed stands competing each other because of their complexity. Recently, however, it becomes able to analyze the dynamics of ecosystem by model simulation with electric computer owing to introduce the method of systems engineering into ecological research. This report deals with model simulation of plant gtowth in mixed stands competing each other in relation to light environment. In constructing a dynamic model of interspecific competition it was thought to be useful to apply the theory of system dynamics developed by J. W. Forrester, because it was simple and easy to understand. The direct object of the model construction in this study was limited to simulate the interspecific competition by simple factors and mathematics as possible, since it was easy to propose an alternative model after partly succes of a preliminary model. The model constructed has the following basic structures and functions. 1. Model plants grow in simple process, such as photosynthesis by leaves, respiration of plant organs and translocation of photosynthates (Fig. 1). Interspecific competition is assumed to play an important role only in relation to light environment of the canopy. 2. It is supposed that the competing force of the plants is realized by the following three subsystems; a. Decision of vertical distribution of leaf area in the canopy. b. Calculation of layers mean of radiation fluxes in the canopy. c. Calculation of gross photosynthesis in layers of the canopy. 3. Leaf area in each canopy layer is decided by top dry weight, plant height, canopy height, LAI and distribution pattern of leaf area density. 4. Radiation fluxes at the bottom of each layer are obtained by RAD(i)=RAD(i-1)EXP[-KC·LA(i)C-KW·LA(i)W], and layers mean of the flux densities are approximated by I(i)=[RAD(i-1)+RAD(i)]/2, where, RAD(0), RAD(i), solar flux density (constant value), and radiation flux density in the i-th layer, respectively; LA(i)C, LA(i)W, leaf area of crop and weed in the i-th layer; and KC, KW, extinction coefficient of crop and weed. 5. Photosynthetic rates in the i-th layer of crop is, then, approximated by PHS(i)C=[KC·BC·I(i)·LA(i)C]/[1+AC·I(i)·KC], where, AC, BC, parameters of light-photosynthesis curves. 6. Plants respire dark respiration which is proportional to its dry matter in day and night and light respiration which is proportional to the gross photosynthesis of the plant in daylight (12 hrs.). 7. It is assumed that the model plants have the flows of photosynthates from leaves to each organs after temporary store (one day). The following results were obtained by 100 day simulation of the interspecific competition model, supposing that crop was tipland rice and weed was crabgrass (Digitaria adsendens): 1. Comparison of simulated values obtained with parameters in Table 1 and initial values in Table 2 to observed values in field experiments reported earlier shows good agreement between both plant growth curves except only in the later growth stages of weed (Fig. (6). 2. The alternative values of the parameters, such as specific leaf area, respiration normals and growth normals (allocation ratio) of each organ, clearly show the dependence of growth curves of both plant on these parameters. It is evaluated that specific leaf area and growth normals have stronger effect than respiration normals (Figs. 7, 8 and 9). 3. Weeding experiments with the model simulations agree well to the field experiments obtained earlier, supposing a clean culture, weeding at early and middle growth stages of crop and no weeding with the use of the alternative values of initial dry matter of both model plants (Fig. 10).