A positive net profit strategy and a pure substrate transfer strategy are both necessary for an ensemble to succeed in the presence of a fixed cost

Thomas Friedrich

MPRA Paper from University Library of Munich, Germany

Abstract: Rational net profit maximization or caring transfers according purely to need are two competing ideas seemingly excluding each other. Within the model “transfer space” I show that both strategies are necessary for an ensemble to succeed in the presence of a fixed cost. The transfer space of an ensemble consists of two parties, a source and a sink. Both parties have linear cost functions and saturating benefit functions. Both functions are dependent on the substrate concentration. In the presence of a fixed cost the net profit of a single party is negative at low and high concentrations. An ensemble striving for superadditive net profit is unable to overcome the initial phase of negative net profit within sink as sink is inactive and a forced small test transfer results in subadditivity. This strategy is unable to start in the presence of a fixed cost. The substrate transfer strategy is able to overcome the initial phase of negative net profit and subadditivity with patient transfers and enters the phase of superadditivity. This strategy fails later when the superadditivity turns into subadditivity again. This strategy is unable to stop the transfer. Successful ensembles use both strategies in sequence. Ensembles of strangers and entangled ensembles transfer substrate when the success factor is sufficient. Entanglement reduces the necessity for a high success factor. A mistaken assumption of genetic entanglement within a not entangled ensemble harms performance. No ensemble can compete successfully with less quantity and less quality than the competitor.

Keywords: source; sink; ensemble; net profit; benefit factor; cost factor; superadditivity; subadditivity; transfer strategy; net profit strategy; entanglement; quality; quantity (search for similar items in EconPapers)
JEL-codes: Z00 (search for similar items in EconPapers)
Date: 2023-04-20
New Economics Papers: this item is included in nep-cta
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Citations: View citations in EconPapers (1)

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