Studying regulatory institutions competition and collaboration dynamics in network industries: Using agent-based modeling and simulation

Abstract

In network industries a myriad of organizations compete and collaborate to deliver a product or service. More often than not the geographical extent of these networks places them under the influence of many various regulatory institutions. These institutions enforce rules and policies on network industries to further their own, and their shareholders' interests (citizens and companies of their sovereign entity).The aim of this paper is to highlight this effect and to study its impact on the performance of the overall system. The dichotomy between competition and collaboration is modeled using game theory. A small subset of the air transportation network is used for this case study. The model is limited to the route between New York City and London to eliminate the biasing effect of network externalities, where the utility of a product or service is dependent on the number of users of that product or service. The conceptual model, its preliminary results, and the implications of work are presented.