An Evolutionary Game Theory Approach to Market Competition and Cooperation

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.

The application of post tender negotiation procedure: a public sector procurement perspective in UK

“…At the same time the suppliers also depend on us for their business and therefore we both need each other". This finding supports findings from academic literature [26]. It can thus be concluded that ◄ 33 ► one can predict an outcome of a negotiation if there is a history of existing relationship between a buyer and a supplier.…”

“…The objective is to establish the factors that determine successful outcome during negotiation at post tender stage (agreement between buyer and supplier) and is in line with the proposition that PTN would lead to award of contracts only when there is successful negotiation. There is theoretical proof that cooperation and interdependence contributes to success in negotiation [26]. Nelson & Greenhalgh [27] who support this position use game theory to advance the arguments that rational objectives inform the basis of decision making during negotiations and therefore negotiators use strategic reasoning to approach such negotiations.…”

Evolutionary Game Analysis of Co-Opetition Strategy in Energy Big Data Ecosystem under Government Intervention

“…Therefore, the Shapley value in a cooperative game is used to measure the distribution strategy of cooperative benefits, and thus the value of the distribution coefficient is more reasonable. The Shapley value was put forward in 1953 by Shapley suggested to decision n people bargaining game, for everyone involved in income distribution proportion in the cooperative game provides a good method, its advantage lies in interests allocation is based on the marginal contribution of each participant to stakeholders, making the interests of all participants allocation more reasonable [56]. According to the Shapley value distribution method, the interest distribution strategy of each player φ i [v] is:…”

Evolutionary Game Analysis of Firms’ Technological Strategic Choices: A Perspective of the Behavioral Biases

“…Model. e market competition between two firms can seem like a typical game process [64], which could be composed of four stages. (1) e first stage is the selection of the strategy.…”