Accession Number : AD0649849

Title :   MATHEMATICAL STRUCTURE AND ANALYSIS OF THE NONSYMMETRIC GAME. PART IV,

Corporate Author : YALE UNIV NEW HAVEN CONN COWLES FOUNDATION FOR RESEARCH IN ECONOMICS

Personal Author(s) : Levitan,Richard ; Shubik,Martin

Report Date : 02 MAR 1967

Pagination or Media Count : 42

Abstract : The prime concern of the paper was the formulation and exploration of an explicit mathematical model of a nonsymmetric oligopolistic market. There are many different concepts of 'solution' which may be applied to such a structure. It is believed that (at least based upon experience with oligopoly games) the noncooperative equilibrium solution is the best short term predictor of behavior. It was observed that by making both behavioral (noncooperative equilibrium) and structural (the quadratic payoff functions) assumptions, parameters could be estimated from corporate and other market information. A game was produced with parameters that look 'somewhat like' an actual industry and has the property that the noncooperative solution gives the profits, sales and prices of that industry at a point in time. The assumptions of a linear aggregate demand function and of constant average costs with capacity limitations lead, in the symmetric case, to quadratic payoff functions for the firms and in the nonsymmetric case to the model formulated. Given the difficulties in microeconomic measurement and the complexity of even highly simplified n-firm market models the detailed exploration of solutions of models with more complex demand or cost functions does not appear to be merited at this time. It is not evident that any qualitatively different phenomena will be encountered by using quadratic or higher approximations for demand or cost conditions. (Author)

Descriptors :   (*GAME THEORY, ECONOMICS), (*ECONOMICS, MATHEMATICAL MODELS), EQUATIONS, COMMERCE, MATHEMATICAL ANALYSIS, COSTS, BUDGETS, INDUSTRIES, MONEY

Subject Categories : Economics and Cost Analysis

Distribution Statement : APPROVED FOR PUBLIC RELEASE