Cooperation promotes the sustainability of companies: Lattice-gas model for a market

Ayako Morishita and Kei-ichi Tainaka

Physica A: Statistical Mechanics and its Applications, 2019, vol. 525, issue C, 119-127

Abstract: In Japan, there are many long-lived firms which survive more than 200 years. Such companies typically use a cooperative strategy: win–win interactions with other companies. Here, we apply agent-based model or lattice-gas formulation to a market composed of two or three long-lived companies. The basic equation enables us to obtain the market share of individual companies. We carry out scenario analyses, where each company changes the magnitude of cooperation. The scenario examined illustrates that a treacherous management, such as the reduction of cooperation, is advantageous in a short period. However, it is disadvantageous for a long period due to tit-for-tat. As the system contains more companies, cooperative management becomes more effective.

Keywords: Lattice-gas formulation; Company profit; Long-lived companies; Market share; Cooperation and competition; Agent-based model (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:phsmap:v:525:y:2019:i:c:p:119-127

DOI: 10.1016/j.physa.2019.03.005

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