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Simulating the Ecology of Oligopoly Games with Genetic Algorithms

Author

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  • Chih-Chi Ni

    (National Chengchi University)

  • Shu-Heng Chen

    (National Chengchi University)

Abstract

This paper extends the N -person IPD game into a more interesting one in economics: the oligopoly game. Due to its dynamics of market share, the oligopoly game is more complicated and need not be exactly an N -person IPD game. Using genetic algorithms, we simulate oligopoly games under various settings. It is found that, even in the case of the three-oligopolist (three-player) game, collusive pricing (cooperation) is not the most dominating result.

Suggested Citation

  • 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.
    • Handle: RePEc:sce:scecf9:1012
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    References listed on IDEAS

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    1. Green, Edward J & Porter, Robert H, 1984. "Noncooperative Collusion under Imperfect Price Information," Econometrica, Econometric Society, vol. 52(1), pages 87-100, January.
    2. Fudenberg, Drew & Tirole, Jean, 1989. "Noncooperative game theory for industrial organization: An introduction and overview," Handbook of Industrial Organization, in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 1, chapter 5, pages 259-327, Elsevier.
    3. David F. Midgley & Robert E. Marks & Lee C. Cooper, 1997. "Breeding Competitive Strategies," Management Science, INFORMS, vol. 43(3), pages 257-275, March.
    4. Bruno Beaufils & Jean-Paul Delahaye & Philippe Mathieu, 1998. "Complete Classes of Strategies for the Classical Iterated Prisoner's Dilemma," Post-Print hal-00731989, HAL.
    5. Shapiro, Carl, 1989. "Theories of oligopoly behavior," Handbook of Industrial Organization, in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 1, chapter 6, pages 329-414, Elsevier.
    6. Abreu, Dilip & Pearce, David & Stacchetti, Ennio, 1986. "Optimal cartel equilibria with imperfect monitoring," Journal of Economic Theory, Elsevier, vol. 39(1), pages 251-269, June.
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    Cited by:

    1. Qi, Chun & Tang, John C.S., 2006. "Foreign direct investment: A genetic algorithm approach," Socio-Economic Planning Sciences, Elsevier, vol. 40(2), pages 143-155, June.
    2. Robert Somogyi & Janos Vincze, 2011. "Price Rigidity and Strategic Uncertainty An Agent-based Approach," CERS-IE WORKING PAPERS 1135, Institute of Economics, Centre for Economic and Regional Studies.

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