Using co-evolutionary programming to simulate strategic behaviour in markets

Tony Curzon Price ()
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Tony Curzon Price: Energy Policy Group, Imperial College, 48 Princes Gardens, London SW7 2PE, UK

Journal of Evolutionary Economics, 1997, vol. 7, issue 3, pages 219-254

Abstract: This paper describes the use of a genetic algorithm (GA) to model several standard industrial organisation games: Bertrand and Cournot competition, a vertical chain of monopolies, and a simple model of an electricity pool. The intention is to demonstrate that the GA performs well as a modelling tool in these standard settings, and that evolutionary programming therefore has a potential role in applied work requiring detailed market simulation. The advantages of using a GA over scenario analysis for applied market simulation are outlined. Also explored are the way in which the equilibria discovered by the GA can be interpreted, and what the market analogue for the GA process might be.

Keywords: Industrial organisation; Evolutionary programming; Genetic algorithms; Strategy selection; Learning (search for similar items in EconPapers)
JEL-codes: C61 C72 D43 D44 L13 L94 (search for similar items in EconPapers)
Date: 1997-10-21
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