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Adm. Sci. 2014, 4(3), 192-218; doi:10.3390/admsci4030192
Article

Competition in a New Industrial Economy: Toward an Agent-Based Economic Model of Modularity

1
 and 2,*
Received: 28 February 2014; in revised form: 4 June 2014 / Accepted: 18 June 2014 / Published: 4 July 2014
(This article belongs to the Special Issue Computational Organization Theory)
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Abstract: When firms (conglomerates) are competing, not only for the present, with a given population of customers and a fixed set of commodities or service, but also for the future, in which products are constantly evolving, what will be their competitive strategies and what will be the emerging ecology of the market? In this paper, we use the agent-based modeling of a modular economy to study the markup rate dynamics in a duopolistic setting. We find that there are multiple equilibria in the market, characterized by either a fixed point or a limit cycle. In the former case, both firms compete with the same markup rate, which is a situation similar to the familiar classic Bertrand model, except that the rate is not necessarily zero. In the latter case, both firms survive by maintaining different markup rates and different market shares.
Keywords: modularity; modular economy; genetic programming; hierarchy; markups modularity; modular economy; genetic programming; hierarchy; markups
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

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MDPI and ACS Style

Chie, B.-T.; Chen, S.-H. Competition in a New Industrial Economy: Toward an Agent-Based Economic Model of Modularity. Adm. Sci. 2014, 4, 192-218.

AMA Style

Chie B-T, Chen S-H. Competition in a New Industrial Economy: Toward an Agent-Based Economic Model of Modularity. Administrative Sciences. 2014; 4(3):192-218.

Chicago/Turabian Style

Chie, Bin-Tzong; Chen, Shu-Heng. 2014. "Competition in a New Industrial Economy: Toward an Agent-Based Economic Model of Modularity." Adm. Sci. 4, no. 3: 192-218.

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