8 research outputs found
Nonlinear Cournot and Bertrand-type dynamic triopoly with differentiated products and heterogeneous expectations
In a differentiated triopoly model with heterogeneous firms, the local stability of the Nash equilibrium under both quantity and price competition is analyzed. We find that the presence of a firm following a gradient rule based on marginal profits, and a player with adaptive expectations, determines the local stability of the Nash equilibrium, regardless the competition type, while the effects of the degree of product differentiation on the stability depend on the nature of products. Moreover, the Nash equilibrium is more stable under quantity competition than under price competition
More for less : on consumer rationality and bargaining power on telecommunication markets
We analyse the large scale agent-based model of a prepaid telecommunication market with oligopolistic competition, heterogeneous calling patterns and different levels of agent rationality. We apply innovative implementation approach of utilizing high performance CUDA computing devices which allows us to consider population of up to 1 million consumers. We measure influence of a call graph structure, intra-family network choice coordination and agent rationality level on the market equilibrium. We discover that boundedly rational subscribers, who exploit simple decision heuristics to coordinate network choice within closed user groups, exert much stronger pressure on suppliers than fully rational ones. This leads to lower average calling costs, increased welfare and decreased monopolistic power of operators. We also observe asymmetry in operator margins and volume of on-net and off-net calls in accordance with empirical facts
Un modelo de duopolio verticalmente diferenciado con delegación estratégica: análisis estático y dinámico
En este trabajo se estudia la competencia en precios en un modelo de duopolio verticalmente diferenciado y en presencia de delegación estratégica, tanto desde una perspectiva estática como dinámica.El análisis estático, permite demostrar que la decisión óptima de los propietarios de las empresas consiste en fijar una remuneración a sus gestores basada en la combinación de beneficios y ventas que les incentive a comportarse de forma poco agresiva. La incorporación de la perspectiva temporal en el estudio de la competencia en precios se realiza mediante la adopción de distintos esquemas de expectativas en la toma de decisiones de los gerentes, en un contexto de racionalidad limitada. Ello permite demostrar que, si ambas empresas adoptan expectativas adaptativas, el equilibrio de Bertrand-Nash será siempre localmente asintóticamente estable. Si al menos una de las empresas sigue la regla del gradiente, existe la posibilidad de que el equilibrio pierda su carácter atractor a medida que aumenta su velocidad de ajuste, surgiendo dinámicas cada vez más complejas. También se demuestra que la existencia de delegación estratégica y diferenciación vertical del producto puede afectar a la estabilidad dinámica del equilibrio<br /
Open Access to Telecommunications Infrastructure and Digital Services: Competition, Cooperation and Regulation
Open Access, defined as the non-discriminatory access to an upstream bottleneck resource, takes a central role in information and communications technology markets. This thesis investigates the competitive and cooperative interactions in these markets, where firms require access to an essential input resource. Theoretical analyses and experimental evaluations are employed to examine market outcomes under alternative regulatory institutions and voluntary access agreements
Dynamic mixed duopoly: A model motivated by Linux vs. Windows
This paper analyzes a dynamic mixed duopoly in which a profit-maximizing competitor interacts with a competitor that prices at zero (or marginal cost), with the cumulation of output affecting their relative positions over time. The modeling effort is motivated by interactions between Linux, an open-source operating system, and Microsoft's Windows in the computer server segment, and consequently emphasizes demand-side learning effects that generate dynamic scale economies (or network externalities). Analytical characterizations of the equilibrium under such conditions are offered, and some comparative static and welfare effects are examined.open-source software; network effects; microsoft; linux; competitive dynamics; strategy;
Essays on bounded rationality: individual decision and strategic interaction
Economics is a social science which, therefore, focuses on people and on
the decisions they make, be it in an individual context, or in group situations.
It studies human choices, in face of needs to be fulfilled, and a limited amount
of resources to fulfill them. For a long time, there was a convergence between
the normative and positive views of human behavior, in that the ideal and
predicted decisions of agents in economic models were entangled in one single
concept. That is, it was assumed that the best that could be done in each
situation was exactly the choice that would prevail. Or, at least, that the facts
that economics needed to explain could be understood in the light of models
in which individual agents act as if they are able to make ideal decisions.
However, in the last decades, the complexity of the environment in which
economic decisions are made and the limits on the ability of agents to deal
with it have been recognized, and incorporated into models of decision making
in what came to be known as the bounded rationality paradigm. This was
triggered by the incapacity of the unboundedly rationality paradigm to explain
observed phenomena and behavior. This thesis contributes to the literature
in three different ways. Chapter 1 is a survey on bounded rationality, which gathers and organizes
the contributions to the field since Simon (1955) first recognized the necessity
to account for the limits on human rationality. The focus of the survey is
on theoretical work rather than the experimental literature which presents
evidence of actual behavior that differs from what classic rationality predicts.
The general framework is as follows. Given a set of exogenous variables, the
economic agent needs to choose an element from the choice set that is avail-
able to him, in order to optimize the expected value of an objective function
(assuming his preferences are representable by such a function). If this problem is too complex for the agent to deal with, one or more of its elements is
simplified. Each bounded rationality theory is categorized according to the
most relevant element it simplifes.
Chapter 2 proposes a novel theory of bounded rationality. Much in the
same fashion as Conlisk (1980) and Gabaix (2014), we assume that thinking
is costly in the sense that agents have to pay a cost for performing mental
operations. In our model, if they choose not to think, such cost is avoided,
but they are left with a single alternative, labeled the default choice. We exemplify the idea with a very simple model of consumer choice and identify the
concept of isofin curves, i.e., sets of default choices which generate the same
utility net of thinking cost. Then, we apply the idea to a linear symmetric
Cournot duopoly, in which the default choice can be interpreted as the most
natural quantity to be produced in the market. We find that, as the thinking
cost increases, the number of firms thinking in equilibrium decreases. More
interestingly, for intermediate levels of thinking cost, an equilibrium in which
one of the firms chooses the default quantity and the other best responds to
it exists, generating asymmetric choices in a symmetric model. Our model is
able to explain well-known regularities identified in the Cournot experimental
literature, such as the adoption of different strategies by players (Huck et al.
, 1999), the inter temporal rigidity of choices (Bosch-Dom enech & Vriend,
2003) and the dispersion of quantities in the context of di cult decision making (Bosch-Dom enech & Vriend, 2003).
Chapter 3 applies a model of bounded rationality in a game-theoretic set-
ting to the well-known turnout paradox in large elections, pivotal probabilities
vanish very quickly and no one should vote, in sharp contrast with the ob-
served high levels of turnout. Inspired by the concept of rhizomatic thinking,
introduced by Bravo-Furtado & Côrte-Real (2009a), we assume that each per-
son is self-delusional in the sense that, when making a decision, she believes
that a fraction of the people who support the same party decides alike, even
if no communication is established between them. This kind of belief simplifies the decision of the agent, as it reduces the number of players he believes
to be playing against { it is thus a bounded rationality approach. Studying
a two-party first-past-the-post election with a continuum of self-delusional
agents, we show that the turnout rate is positive in all the possible equilibria,
and that it can be as high as 100%. The game displays multiple equilibria,
at least one of which entails a victory of the bigger party. The smaller one
may also win, provided its relative size is not too small; more self-delusional
voters in the minority party decreases this threshold size. Our model is able
to explain some empirical facts, such as the possibility that a close election
leads to low turnout (Geys, 2006), a lower margin of victory when turnout is
higher (Geys, 2006) and high turnout rates favoring the minority (Bernhagen
& Marsh, 1997)
International Conference on Mathematical Analysis and Applications in Science and Engineering – Book of Extended Abstracts
The present volume on Mathematical Analysis and Applications in Science and Engineering - Book of
Extended Abstracts of the ICMASC’2022 collects the extended abstracts of the talks presented at the
International Conference on Mathematical Analysis and Applications in Science and Engineering –
ICMA2SC'22 that took place at the beautiful city of Porto, Portugal, in June 27th-June 29th 2022 (3 days).
Its aim was to bring together researchers in every discipline of applied mathematics, science, engineering,
industry, and technology, to discuss the development of new mathematical models, theories, and
applications that contribute to the advancement of scientific knowledge and practice. Authors proposed
research in topics including partial and ordinary differential equations, integer and fractional order
equations, linear algebra, numerical analysis, operations research, discrete mathematics, optimization,
control, probability, computational mathematics, amongst others.
The conference was designed to maximize the involvement of all participants and will present the state-of-
the-art research and the latest achievements.info:eu-repo/semantics/publishedVersio
Advances in Computational Social Science and Social Simulation
Aquesta conferència és la celebració conjunta de la "10th Artificial Economics Conference AE", la "10th Conference of the European Social Simulation Association ESSA" i la "1st Simulating the Past to Understand Human History SPUHH".Conferència organitzada pel Laboratory for SocioÂ-Historical Dynamics Simulation (LSDS-ÂUAB) de la Universitat Autònoma de Barcelona.Readers will find results of recent research on computational social science and social simulation economics, management, sociology,and history written by leading experts in the field. SOCIAL SIMULATION (former ESSA) conferences constitute annual events which serve as an international platform for the exchange of ideas and discussion of cutting edge research in the field of social simulations, both from the theoretical as well as applied perspective, and the 2014 edition benefits from the cross-fertilization of three different research communities into one single event. The volume consists of 122 articles, corresponding to most of the contributions to the conferences, in three different formats: short abstracts (presentation of work-in-progress research), posters (presentation of models and results), and full papers (presentation of social simulation research including results and discussion). The compilation is completed with indexing lists to help finding articles by title, author and thematic content. We are convinced that this book will serve interested readers as a useful compendium which presents in a nutshell the most recent advances at the frontiers of computational social sciences and social simulation researc