Please use this identifier to cite or link to this item: https://ah.nccu.edu.tw/handle/140.119/78511


Title: Non-price Competition in a Modular Economy: An Agent-Based Computational Model
Authors: Chie, Bin-Tzong;Chen, Shu-Heng
陳樹衡
Contributors: 經濟系
Keywords: Conglomerates;Consumer;Duopolistic;Firm;Firms;Investment;Prices;Quality;Simulation
Date: 2013-12
Issue Date: 2015-09-15 15:28:52 (UTC+8)
Abstract: While it has been well acknowledged by economists for a long time that competition is not just about price, the conventional quantity-based economic models have had difficulties integrating price competition and quality competition into a coherent framework. In this paper, motivated by Herbert Simon's view of near decomposability or modularity, we propose a quality-based economic model called the modular economy. In this modular economy, quality is manifested by the evolutionary design of more sophisticated and customized products that can satisfy consumers' satisfaction to a higher degree. Two essential features of the modular economy are founded through the agent-based simulation of a duopolistic competition. First, market competition tends to be self-annihilating; the competition will eventually end up with a dominant or a monopoly firm (conglomerate). Second, the high-markup firm has a better chance to be the only survivor than its low-markup competitor. We analyze these features through the complex cyclical dynamics of prices, profits, dividends, investment, working capital, and quality.
Relation: Economia Politica, 30(3), 273-299
Data Type: article
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