Advanced Search
MyIDEAS: Login

Breeding Competitive Strategies

Contents:

Author Info

  • David F. Midgley

    (Australian Graduate School of Management, University of New South Wales, Australia 2052)

  • Robert E. Marks

    (Australian Graduate School of Management, University of New South Wales, Australia 2052)

  • Lee C. Cooper

    (Anderson Graduate School of Management, University of California at Los Angeles, Los Angeles, California 90095)

Abstract

We show how genetic algorithms can be used to evolve strategies in oligopolistic markets characterized by asymmetric competition. The approach is illustrated using scanner tracking data of brand actions in a real market. An asymmetric market-share model and a category-volume model are combined to represent market response to the actions of brand managers. The actions available to each artificial brand manager are constrained to four typical marketing actions of each from the historical data. Each brand's strategies evolve through simulations of repeated interactions in a virtual market, using the estimated weekly profits of each brand as measures of its fitness for the genetic algorithm. The artificial agents bred in this environment outperform the historical actions of brand managers in the real market. The implications of these findings for the study of marketing strategy are discussed.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://dx.doi.org/10.1287/mnsc.43.3.257
Download Restriction: no

Bibliographic Info

Article provided by INFORMS in its journal Management Science.

Volume (Year): 43 (1997)
Issue (Month): 3 (March)
Pages: 257-275

as in new window
Handle: RePEc:inm:ormnsc:v:43:y:1997:i:3:p:257-275

Contact details of provider:
Postal: 7240 Parkway Drive, Suite 300, Hanover, MD 21076 USA
Phone: +1-443-757-3500
Fax: 443-757-3515
Email:
Web page: http://www.informs.org/
More information through EDIRC

Related research

Keywords: competitive strategies; pricing; asymmetric market-share models; evolutionary algorithms; repeated games;

Other versions of this item:

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Robert E. Marks, . "Evolved Perception and Behaviour in Oligopolies," Computing in Economics and Finance 1996 _038, Society for Computational Economics.
  2. Steven Kimbrough & Frederic Murphy, 2009. "Learning to Collude Tacitly on Production Levels by Oligopolistic Agents," Computational Economics, Society for Computational Economics, vol. 33(1), pages 47-78, February.
  3. Augusto Rupérez Micola & Albert Banal Estañol & Derek W. Bunn, 2006. "Incentives and Coordination in Vertically Related Energy Markets," CIG Working Papers SP II 2006-02, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG).
  4. Robert Marks, 2007. "Validating Simulation Models: A General Framework and Four Applied Examples," Computational Economics, Society for Computational Economics, vol. 30(3), pages 265-290, October.
  5. Geoffrey Hodgson & Thorbjoern Knudsen, 2012. "Agreeing on generalised Darwinism: a response to Pavel Pelikan," Journal of Evolutionary Economics, Springer, vol. 22(1), pages 9-18, January.
  6. Floortje Alkemade & Han Poutré & Hans Amman, 2006. "Robust Evolutionary Algorithm Design for Socio-economic Simulation," Computational Economics, Society for Computational Economics, vol. 28(4), pages 355-370, November.
  7. Chih-Chi Ni & Shu-Heng Chen, 1999. "Simulating the Ecology of Oligopoly Games with Genetic Algorithms," Computing in Economics and Finance 1999 1012, Society for Computational Economics.
  8. Fernando S. Oliveira & Derek W. Bunn & London Business School, 2006. "Modeling the strategic trading of electricity assets," Computing in Economics and Finance 2006 235, Society for Computational Economics.
  9. Gruca, Thomas S. & Klemz, Bruce R., 2003. "Optimal new product positioning: A genetic algorithm approach," European Journal of Operational Research, Elsevier, vol. 146(3), pages 621-633, May.
  10. Gottfried Haber, 2008. "Monetary and Fiscal Policy Analysis With an Agent-Based Macroeconomic Model," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), Justus-Liebig University Giessen, Department of Statistics and Economics, vol. 228(2+3), pages 276-295, June.
  11. Butel, Lynne & Watkins, Alison, 2000. "Evolving Complex Organizational Structures in New and Unpredictable Environments," Journal of Business Research, Elsevier, vol. 47(1), pages 27-33, January.
  12. Shu-Heng Chen & Chung-Ching Tai, 2006. "On the Selection of Adaptive Algorithms in ABM: A Computational-Equivalence Approach," Computational Economics, Society for Computational Economics, vol. 28(1), pages 51-69, August.
  13. Fish, Kelly E. & Johnson, John D. & Dorsey, Robert E. & Blodgett, Jeffery G., 2004. "Using an artificial neural network trained with a genetic algorithm to model brand share," Journal of Business Research, Elsevier, vol. 57(1), pages 79-85, January.
  14. Shu-Heng Chen & Chung-Ching Tai, 2006. "Republication: On the Selection of Adaptive Algorithms in ABM: A Computational-Equivalence Approach," Computational Economics, Society for Computational Economics, vol. 28(4), pages 313-331, November.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:inm:ormnsc:v:43:y:1997:i:3:p:257-275

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mirko Janc).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.