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Breeding Hybrid Strategies: Optimal Behaviour for Oligopolists

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Author Info
Marks, R E

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Abstract

Oligopolistic pricing decisions--in which the choice variable is not dichotomous, as in the simple prisoner's dilemma, but continuous--have been modeled as a generalized prisoner's dilemma (GPD) by Fader and Hauser, who sought, in the two MIT Computer Strategy Tournaments, to obtain an effective generalization of Rapoport's Tit for Tat for the three-person repeated game. Holland's genetic algorithm and Axelrod's representation of contingent strategies provide a means of generating new strategies in the computer, through machine learning, without outside submissions. This paper discusses how findings from two-person tournaments can be extended to the GPD, in particular how the author's winning strategy in the Second MIT Competitive Strategy Tournament could be bettered. The paper provides insight into how oligopolistic pricing competitors can successfully compete, and underlines the importance of "niche" strategies, successful against a particular environment of competitors.

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Publisher Info
Article provided by Springer in its journal Journal of Evolutionary Economics.

Volume (Year): 2 (1992)
Issue (Month): 1 (March)
Pages: 17-38
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Handle: RePEc:spr:joevec:v:2:y:1992:i:1:p:17-38

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  1. Kellermann, Konrad & Balmann, Alfons, 2006. "How Smart Should Farms Be Modeled? Behavioral Foundation of Bidding Strategies in Agent-Based Land Market Models," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25446, International Association of Agricultural Economists. [Downloadable!]
  2. Stefano Balbi & Carlo Giupponi, 2009. "Reviewing agent-based modelling of socio-ecosystems: a methodology for the analysis of climate change adaptation and sustainability," Working Papers 2009_15, University of Venice "Ca' Foscari", Department of Economics. [Downloadable!]
  3. Clemens, Christiane & Riechmann, Thomas, 1996. "Evolutionäre Optimierungsverfahren und ihr Einsatz in der ökonomischen Forschung," Diskussionspapiere der Wirtschaftswissenschaftlichen Fakultät der Universität Hannover dp-195, Universität Hannover, Wirtschaftswissenschaftliche Fakultät. [Downloadable!]
  4. Tony Curson Price, 1997. "Using co-evolutionary programming to simulate strategic behaviour in markets," Levine's Working Paper Archive 588, David K. Levine. [Downloadable!]
  5. Leigh TESFATSION, 1995. "How Economists Can Get Alife," Economic Report 37, Iowa State University Department of Economics. [Downloadable!]
  6. Robert Marks, 2007. "Validating Simulation Models: A General Framework and Four Applied Examples," Computational Economics, Springer, vol. 30(3), pages 265-290, October. [Downloadable!] (restricted)
  7. Leigh Tesfatsion, 1998. "Teaching Agent-Based Computational Economics to Graduate Students," Computational Economics 9809001, EconWPA, revised 16 Nov 1998. [Downloadable!]
    Other versions:
  8. Leigh Tesfatsion, 2002. "Agent-Based Computational Economics," Computational Economics 0203001, EconWPA, revised 15 Aug 2002. [Downloadable!]
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