Application of Game Theory for Duopoly Market Analysis

Abstract

Abstract. The paper provides the analysis of game theory models application to identify duopoly market equilibrium (quantities sold and market prices), to evaluate and compare the results of enterprises in a market. The purpose of the analysis is to determine to what extent theoretical models correspond to real life, that is how reliable they are in supporting and estimating decisions of duopoly companies, fortifying market prices and quantities sold, evaluating company's competing positions and possibilities for decision co-ordination. To describe discrete strategies equilibrium the "Prisoner's Dilemma" model is applied to a hypothetic market entrance game with possible side payments. Further analysis of the market entrance game incorporates mixed strategies based "Matching Pennies" model in case discrete strategies equilibrium does not exist. Continuous strategies are described analyzing hypothetic duopoly by applying Cournot, Stackelberg and Bertrand models. The fi rst and the second mover advantage issues are raised comparing outcomes of dynamic Stackelberg and Bertrand games for a leader and a follower. Stability and utility of cartel agreement for its participants is mathematically supported with the help of a multi-step repeated Cournot game. Having described, compared and applied the main game theory models to artifi cial duopoly market situations, the author passes over to the comparative analysis of the models' weaknesses and problems related to their practical application.

The Model of the Integrated Competitive Strategy of an Enterprise in Oligopolic Market

“…Oligopolijos, kaip tiriamos rinkos struktūros, pasirinkimas grindžiamas jos paplitimu Lietuvos ekonomikoje (Ginevičius, Krivka 2009b), sudėtinga ir nevienareikšmiškai traktuojama oligopolinių įmonių elgsena bei potencialiu oligopolinės sandaros neefektyvumu (Ginevičius, Krivka 2008a, 2008b, 2009aKrivka, Ginevičius 2009). Straipsnio tikslas -sudaryti moksliškai pagrįstą, originalų integruotos konkurencinės strategijos modelį, atitinkantį oligopolijos kaip rinkos struktūros sąlygas, taikytiną oligopolinėje rinkoje veikiančiai įmonei.…”

“…Oligopolinėms įmonėms būdingos strategijos taip pat kildinamos iš teorinių oligopolijos modelių: kartelinių susitarimų sudarymas ir kitoks veiksmų derinimas, pirmojo ir antrojo ėjimo pranašumo strategijos, konkurencija kainomis ir gaminamos produkcijos kiekiais, potencialių naujokų įėjimo atgrasinimas ir kt. (Von Neumann, Morgenstern 1953;Friedman 1969Friedman , 1971Friedman , 1988Koons 1992;Ginevičius, Krivka 2008a).…”

https://journals.vgtu.lt/index.php/JCEM/article/view/5898

“…There is a wide range of methods ( (Zavadskas and Kaklauskas 1996); Game theory methods (Zavadskas and Turskis 2008;Peldschus 2008Peldschus , 2009Ginevičius and Krivka 2008;Turskis et al 2009) and other methods (Turskis 2008).…”

Model for Integrated Project Management

“…A multiple criteria analysis (Ginevičius 2008;Ginevičius and Podvezko 2008;Ginevičius et al 2008;Ginevičius and Krivka 2008;Kaklauskas 1999;Kaklauskas et al 2005Kaklauskas et al , 2007aZavadskas et al 1994 of integrated project management's components and a selection of the most effi cient version of project's management life cycle were determined at this stage. After this stage, the received compatible and rational components of integrated project management are joined into the full integrated project management process by using intelligent systems (Kaklauskas and Zavadskas 2002;Kaklauskas et al 2006aKaklauskas et al , b, 2007cKaklauskas and Zavadskas 2007 (Zavadskas et al 2004), housing credit access ), facilities management (Lepkova et al 2008).…”