Adaptive and evolutionary mathematical models in economics

none1openBischi, G.I.Bischi, GIAN ITAL

Oligopoly game: Price makers meet price takers

© 2018 Elsevier B.V. The paper studies an oligopoly game, where firms can choose between price-taking and price-making strategies. On a mixed market price takers are always better off than price makers, though the profits of both types decline in the number of price takers. We investigate and confront two possibilities of firms’ decisions about their types: forward-looking equilibrium reasoning and backward-looking individual learning. We find that the Cournot outcome is the only equilibrium prediction and it is learnable if firms are sufficiently sensitive to profit differences. However, with a larger number of firms, a unilateral deviation from Cournot behavior becomes profitable. Under learning this incentive creates a space for permanent oscillations over different markets with a positive but low number of price takers

The emergence of nonlinear dynamics in three different economic models

A partire dai contributi seminali di Goodwin (1947), Hicks (1950) e Day (1982), nei modelli economici si \ue8 iniziato ad investigare il possibile insorgere di dinamiche non lineari. Uno dei progressi in quest'area di ricerca \ue8 stato quello di capire se tali dinamiche non lineari possono verificarsi quando si considerano comportamenti espliciti degli agenti, ovvero quando il processo decisionale di questi ultimi \ue8 definito attraverso ottimizzazione o un\u2019euristica decisionale. Lo scopo di questa tesi \ue8 quello di mostrare come l'emergere di dinamiche non lineari possa avvenire in diversi contesti economici. Nel secondo capitolo, (i) esaminiamo la letteratura sulla coevoluzione tra variabili economiche e ambiente analizzando sia modelli dinamici cruciali della teoria economica, come il modello Solow, il modello Ramsey-Cass-Koopmans, il lavoro di Day (1982) sia alcuni importanti modelli dinamici a tempo discreto; (ii) analizziamo un modello a generazioni sovrapposte in cui l'attivit\ue0 economica dipende dallo sfruttamento di una risorsa naturale ad accesso libero e nel quale inoltre si assume la presenza di una spesa pubblica per la manutenzione ambientale. Caratterizzando alcune propriet\ue0 della mappa ed eseguendo simulazioni numeriche, vengono analizzate le conseguenze dell'interazione tra spesa pubblica ambientale e settore privato e, pi\uf9 in dettaglio, discussi i diversi scenari nei quali sia equilibri multipli che dinamiche complesse (regimi caotici) possono apparire. Nel terzo capitolo, ricordando il lavoro pionieristico di Cournot (1838), si analizza un modello dinamico di duopolio in cui le imprese producono beni differenziati, i costi marginali sono assunti costanti e le funzioni di domanda microfondate. Inoltre, si suppone che le imprese adottino meccanismi decisionali diversi, basati su un grado ridotto di razionalit\ue0. In particolare, si considera che un'impresa adotti l'approccio Local Monopolistic Approximation (LMA) (Bischi et al., 2007), mentre il rivale adegua il proprio livello di produzione secondo la regola del gradiente (Bischi et al., 1999). Nell\u2019analisi vengono studiate le condizioni per la stabilit\ue0 dell'equilibrio di Nash ed alcuni scenari di biforcazione al variare dei parametri cruciali del modello. Inoltre, viene mostrato come sia un livello alto che basso di differenziazione di prodotto pu\uf2 avere un ruolo destabilizzante nel sistema. Infine, nell'ultimo capitolo, si utilizza un approccio evolutivo, come in Bischi et al. (2009), al fine di studiare l\u2019evoluzione nel lungo periodo delle decisioni delle donne riguardo l\u2019allocazione del loro tempo tra lavoro e famiglia. In particolare, si assume una popolazione composta da due sottogruppi: donne orientate alla famiglia (o family-oriented) e donne orientate alla carriera (o career-oriented). Le preferenze di entrambe le tipologie di donne sono influenzate da benefici estrinseci (ad esempio, un contratto di lavoro basato sulle performance), da costi intrinseci (cio\ue8 la loro innata propensione a trascorrere il tempo sul lavoro o con la famiglia) e dalle norme sociali. Secondo la word of mouth dynamics (Dawid, 1999), si assume inoltre che le donne interagiscano socialmente e confrontino le loro diverse posizioni, imparando su possibili differenziali di payoff. L'interazione sociale scatena quindi l'evoluzione della distribuzione dei tipi di donne (e dei comportamenti corrispondenti) nella popolazione. L'analisi permette di dimostrare come (i) siano ottenibili sia scenari in cui i due tipi di donne coesistono, sia scenari in cui uno dei due sottogruppi tende a scomparire dalla popolazione; e (ii) a causa del ruolo destabilizzante del parametro dell'intensit\ue0 di scelta (assunto come parametro esogeno), possano emergere sia cicli periodici che regimi caotici

The Profile of a “Warm-Glower”: A Note on Consumer’s Behavior and Public Policy Implications

The paper focuses on the ongoing debate on non-market valuation, including the valuation environmental goods, and the opportunity to use contingent valuation for policy guidance. In fact, contingent valuation critics argue that reported willingness to pay answers do not reflect real economic preferences and, for this reason, should not be used in cost-benefit analysis The attempt to contravene such critique finds many supporters. This paper starts from the latter stream of research and adds two original contributions. First, it sheds light on the individual warm glow motivational profile, exploring the empirical relationship between individual’s socio-economic characteristics and warm glow. Second, it discusses some implications of the presence of warm glow for public policy.Economic value, Contingent valuation, Willingness to pay; Latent factor, Consumer motivations, Warm glow, Ego driven warm glow, Social oriented warm glow, Public policy design

Essays in applied microeconomic theory: crime and defence

The first part of this thesis is concerned with tax competition when the tax receipts fund an anti-crime measure. Both the capital and criminals are mobile between two jurisdictions. The resulting pure strategy Nash equilibrium tax rates are distorted from the optimal tax by the equilibrium migration response of the rich; if positive at the equilibrium then tax competition will result in taxes that are too high whilst if it is negative taxes will be too low compared to the optimum. The best response functions of the model are tested using data from England and Wales. The possibility that they engage in tax competition cannot be ruled out. It is possible for a central government to devolve tax raising powers without the distortion occurring if they can impose an optimal sanction. This, though, is independent of the harm caused by the crime and could be politically difficult to introduce. The second part looks at the Ministry of Defence’s procurement policy since 1985. The role of competition has increased but scant attention was played to the trade-off between maximising the benefits of current competition and obtaining future competition. The Ministry of Defence always chose to take the benefits in the short term arguing any loss of competition merely eliminated excess capacity which the Ministry of Defence would no longer have to pay for. Whilst the empirics suggest this is true during the 1990s, the problems encountered on the Type 45 project at the start of the millennium demonstrate the difficulties they have in procuring given the limited number of domestic firms they can contract with. An alternative mechanism of directed buys, with recourse to a competitive market off the equilibrium path, is suggested as a way in which the Ministry of Defence can preserve competition into the future

Planning capacity expansion under oligopoly: the case of the petrochemical industry

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International Conference Management, Business and Economics

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