A competition model for two CPU vendors

Yinan Tang and J.W. Zhang

Physica A: Statistical Mechanics and its Applications, 2005, vol. 348, issue C, 465-480

Abstract: In a severely competing economic environment, the competing ability of a company must be improved continuously as the reaction to the outer competition pressure. We propose a model developed from Lotka–Volterra competition model with time dependent parameters other than the equilibrium theory so as to describe some characteristics of the technology innovation. The time-dependent parameters comprise carrying capacities and competitive effects. We assume that the technological index is represented, in some degree, by the highest CPU clock frequency. We have quantitatively studied quarterly revenues of AMD and Intel, two chief vendors of the central processing unit (CPU). Moreover, we give the empirical values of the basic parameter set according to theoretical analysis and our simulation results fit the revenue data with reasonable agreement. It demonstrates that the model is capable of describing some important commercial phenomena in certain technology-leading industries. The technology innovation but not the strategy, is the crucial factor of competition, and the first-mover advantage will not be always unbroken. Furthermore, we have found that the unwilling mutualism appeared in the present model cannot be explained by the strategic behavior theory.

Keywords: Lotka–Volterra; Company competition; Technology innovation (search for similar items in EconPapers)
Date: 2005
References: View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:phsmap:v:348:y:2005:i:c:p:465-480

DOI: 10.1016/j.physa.2004.09.018

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