The Stability Of Virtual Equilibrium

The impact of information technology (IT) on the stability of market equilibrium is explained from a simple microeconomic standpoint. Attributes of a dynamically stable “virtual” market equilibrium are described assuming consumer rationality, an elastic supply curve, and minimum static market demand. Three conditions are necessary for long-run price stability of such a “virtual” equilibrium: (1) firm-specific strategic effects have to be completely offset by aggregate demand growth effects, (2) market equilibrium must arise under the constraint of demand sustainability, and (3) consumer indirect utility gains from information availability must exceed their respective disutility from locational search costs. Those conditions stem from more elastic supply together with less elastic demand compared to when IT is not utilized.&nbsp

Strategic Pricing: A Game In Market Economics

In this paper, game theory is applied to the case of price wars in a market scenario game towards a converging solution of Nash equilibrium. This is done using the famous Bertrand Game, starting first with a simple version of a game involving two players with undifferentiated products who move simultaneously by merely choosing their prices, and then proceed by extending the market scenario to a Differentiated Bertrand Game. The market scenario is based on two main rivals. “LOCAL” player is faced by a lower-priced “ASIAN” player who has a significantly lower quality product. Price wars dictate market outcomes. Implications of the game reveal interesting, but rather unexpected, results. Specifically, it is shown that resorting to a price war alone is not the optimum choice by the LOCAL player. Rather, the incumbent must not lower his price, even if faced by a lower priced competitor.  This runs in contrast to traditional price war theory. The introduction of lower priced substitutes do not reveal price reduction of the incumbent firm. A unique Nash equilibrium arises when the LOCAL player differentiates his products and charges higher prices compared to the ASIAN player. Consequently, price competition and price wars, when augmented by differentiated aspects of product quality, do not lead to price convergence nor necessarily lead to price reductions over time

Monopoly: The Case Of Egyptian Steel

The local steel industry in Egypt has been protected by high tariffs which were relaxed lately. The market is segmented according to steel type and there is a dominant steel producer acting as a monopoly in the market. Due to barriers to entry in the short run and the dominant market position of the monopoly, price elasticity became more demand inelastic. However, the dominant market player carries an innovative edge over its competitors. 

Revisiting Egypt's Energy Policy

Egypt's oil and gas sector is one of the most strategic sectors in the economy being the single largest industrial activity in the economy, with exports of crude oil and petroleum products constituting 40% of Egypt's export revenues and 20% of its GDP. However, Egypt is currently trapped between dwindling oil production and increasing domestic consumption, a fact which threatens the country to become a net importer of crude oil as well as deprive it of strongly needed foreign exchange. Yet, Egypt has proven natural gas reserves and its future energy outlook seems to be more affiliated with natural gas especially for future export potential. Given these conditions, a restructuring of the sector is necessary for sustainable development. Suggested strategies in line with Egypt's development efforts are outlined including gradual reduction of energy subsidies and their expected impacts on the economy

Economic Growth And Information Technology: A Note

The usage of information technology (IT) towards sustainable economic growth is found to yield three main effects: (1) an efficiency effect , (2) a scale effect, and (3) a capital utilization effect. The first two effects are multiplicative whereas the third effect is additive on aggregate output productivity. In essence, this paper suggests that  IT is more productive only if the economy is capable of replacing its sustainable capital resources at a rate exceeding that of consumption sacrifice

2D Face Recognition System Based on Selected Gabor Filters and Linear Discriminant Analysis LDA

We present a new approach for face recognition system. The method is based on 2D face image features using subset of non-correlated and Orthogonal Gabor Filters instead of using the whole Gabor Filter Bank, then compressing the output feature vector using Linear Discriminant Analysis (LDA). The face image has been enhanced using multi stage image processing technique to normalize it and compensate for illumination variation. Experimental results show that the proposed system is effective for both dimension reduction and good recognition performance when compared to the complete Gabor filter bank. The system has been tested using CASIA, ORL and Cropped YaleB 2D face images Databases and achieved average recognition rate of 98.9 %