AN EVOLUTIONARY GAME THEORY APPROACH TO MARKET COMPETITION AND COOPERATION

Adrian Vasile (), Carmen Eugenia Costea () and Tania Georgia Viciu ()
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Adrian Vasile: The Bucharest University of Economic Studies, Piata Romana Number 6, Sector 1, Bucharest, Code 010374, Romania
Carmen Eugenia Costea: The Bucharest University of Economic Studies, Piata Romana Number 6, Sector 1, Bucharest, Code 010374, Romania
Tania Georgia Viciu: The Bucharest University of Economic Studies, Piata Romana Number 6, Sector 1, Bucharest, Code 010374, Romania

Advances in Complex Systems (ACS), 2012, vol. 15, issue supp0, 1-15

Abstract: Evolutionary game theory can be attested as a practical apparatus in providing additional information on the workings of the open market and on the blueprint for dynamics in economic phenomena. Through an interdisciplinary approach to different game scenarios, the dependencies among market forces are observed, thus, being capable of offering insight on the incentives for adopting different behaviors. This paper takes use of the different factors that form the payoff of certain strategies which can be adopted by companies, and determines the prerequisites for cooperation or competition while all together constructing settings and predictions on the evolution of the phenomena. Determining the evolutionary stable strategy for different scenarios and looking at the way in which the probability of encountering a certain behavior is constructed, provide the possibility to determine the outcome of an ongoing evolutionary process. By studying the monotony of the probability function in respect to each of the factors that contribute to the payoffs, the study indicates that there is a positive relation between the percentage of population playing competitive strategies and market potential, costs, and risks of penalty for cooperation and a negative relation between this percentage and the disputed market share and supplementary winnings from arrangements.

Keywords: Competition; market dynamics; evolutionary stable strategy (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (5)

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DOI: 10.1142/S0219525912500440

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