Organizational strategy and tacit collusion in oligopoly with agency

We study a model that integrates organizational structure and agency withdynamic price competition in oligopoly. Workers in different levels of the organizational structure have asymmetric information and heterogeneous objectives; i.e., there are agency conflicts within the firm. The organizational strategy of the firm is to determinesequentially the decision power relating to price and non-price competition instruments at each level. We examine the equilibrium organizational and competitive strategy of firms in a duopoly, and characterize the extent of noncooperative tacit collusion (with respect to price and non-price competition) that is feasible. We identify two sets of sufficient conditions that guarantee, (i) the monopoly solution is sustainable at any discount factor (rate of impatience of the workers), or (ii) the monopoly solution is not sustainable for any level of the discount factor. Interestingly, tacit collusion may be feasible when either the agency problem is non-existentor very severe; i.e., firm profits in equilibrium may be non-monotone in the extent of the agency conflict. Our analysis indicates that intrafirm learning and agency will have a stronger impact on feasible tacit collusion in markets where non-price competition plays a strong role. Moreover, there is an intimate connection between the firm's organizational strategy and the extent of tacit collusion with the (industry) business cycle.     

The danger model: application to a competitive market

The behavior of the firm in a competitive market based on the idea of the human system, i.e., using a danger activator and a defence system, is modelled. The proposed model uses three variables: market share ratio, danger index and the ratio of relative investment between the firm and the total investments including the competition. The danger activator, the defence and the market reaction functions, which explain how the danger index becomes activated, how the firm reacts to a danger signal, and the market reaction to the firm’s actions, respectively, are carefully constructed. This leads to a parametric dynamic system that governs the behavior of the competitive market. The following five classical behaviors of a firm result: monopoly, below aimed market share, aimed market share, above aimed market share and out of market. Formulas for a sensitivity analysis are derived to determine how and how much the equilibrium points of the dynamic system change when the parameters change. All the concepts are illustrated by graphs that show the equilibrium points and the trajectories of the system.     

组织文化的演进及其对企业绩效的影响

化作为维持竞争优势的一个源泉，对于企业绩效有着重要的影响作用。本在回顾组织化理论研究演进过程的基础上，探讨了组织化的理论基础，同时分析组织化对企业绩效的影响，分析加强了我们对于企业如何获得良好绩效的理解，奠定了企业取得成功的基础。     

Simple plant location under uniform delivered pricing

Given a geographical system of demand functions, the simple-plant location problem under uniform delivered pricing consists in determining the delivered price taken as uniform for all customers, the number, the locations, the sizes and the market areas of the plants which supply these customers, in order to maximize the profit of the firm. A model is proposed, which allows, moreover, to integrate some aspects of the commercial policy of the firm, i.e., its decision to satisfy all markets with positive demands or profitable markets only, or to allow a maximum unit loss or require a minimum unit gain on each served market. An efficient algorithm is presented and illustrated by an example. Computational results with a code using recursively Erlenkotter's DUALOC program as a subroutine are summarized.     

Coordinating pricing and production decisions in the presence of price competition

In this paper we study the effects of coordinating pricing and production decisions on the improvement of a firm’s position in a price-competitive environment. Assuming duopolistic market conditions, we use game-theoretic concepts and models to analyze two scenarios. A firm’s marketing and production departments may vertically coordinate their pricing and production quantity decisions and the two firms may horizontally compete for price-sensitive random demand. The two scenarios include (i) no coordination and (ii) coordination in both firms. We show that by coordinating their pricing and production decisions, competing firms can increase their profitability—especially when conditions are unfavourable (i.e., with smaller market sizes, higher unit costs and lower unit revenues). While it may be intuitive to expect that coordination will outperform non-coordination, our models provide a means for formalizing and quantifying the differences between the two policies.     

Supply chain cooperation in industrial districts: A simulation analysis

In the past few years the literature on supply chain management has widely emphasized that cooperation among supply chain (SC) firms is a key source of competitive advantage. This paper explores the topic in a particular context, i.e. the industrial district (ID), which constitutes a specific production model where complex SC networks can be identified. SC cooperation may take on several forms in IDs and may produce several benefits (e.g. upgrading quality and reducing costs) so this paper also analyzes the benefits of a specific form of SC cooperation in different competitive scenarios and for diverse ID organizational structures. An agent-based model of SC cooperation in IDs has been developed and a simulation analysis carried out.     

The dynamics of price, quality and productivity improvement decisions

Although quality has received significant attention during the last decades and its economic benefits are beyond any doubt, lots of questions have remained unanswered as to how much, when, and in what to invest to maintain sustainable competitive advantage. A model is introduced here to guide a firm in addressing these questions. The firm produces a single product and operates in a market where monopolistic competition is effective. Demand for the product in the industry depends on both price and performance quality. Increasing productivity knowledge decreases unit production cost, but demand for the company’s product decreases over time, as competitors will be able to offer products with similar performance. Productivity and quality knowledge can be developed through induced and autonomous learning in order to strengthen company position. The paper provides an optimal control formulation of the problem and develops necessary conditions for optimality and characterizes the dynamics of optimal price, quality and investment decisions.     

New differentiated consensus problem with topology cost constraints

A new differentiated consensus problem is studied. The problem is, given a system with multiple classes, consensus is targeted for each class and the consensus values can be different among the classes. Specifically, differentiated consensus is studied in a distributed stochastic network of nodes (or agents), where tasks assigned with different priorities are serviced. The network is assumed to have a switching topology and involves noises, delays in measurements, and topology cost constraints. The goal is to reach a balanced load (i.e., consensus) across the network and, at the same time, to satisfy the topology cost constraint, both for each priority class. A new control protocol is proposed, with which the network resources are allocated in a randomized way with a probability assigned to each priority class. It is shown that the control protocol meets the topology cost constraint and can be used to reach an approximate consensus for each of the priority classes in the network.     

Multiscale agent‐based consumer market modeling

Consumer markets have been studied in great depth, and many techniques have been used to represent them. These have included regression‐based models, logit models, and theoretical market‐level models, such as the NBD‐Dirichlet approach. Although many important contributions and insights have resulted from studies that relied on these models, there is still a need for a model that could more holistically represent the interdependencies of the decisions made by consumers, retailers, and manufacturers. When the need is for a model that could be used repeatedly over time to support decisions in an industrial setting, it is particularly critical. Although some existing methods can, in principle, represent such complex interdependencies, their capabilities might be outstripped if they had to be used for industrial applications, because of the details this type of modeling requires. However, a complementary method—agent‐based modeling—shows promise for addressing these issues. Agent‐based models use business‐driven rules for individuals (e.g., individual consumer rules for buying items, individual retailer rules for stocking items, or individual firm rules for advertizing items) to determine holistic, system‐level outcomes (e.g., to determine if brand X's market share is increasing). We applied agent‐based modeling to develop a multi‐scale consumer market model. We then conducted calibration, verification, and validation tests of this model. The model was successfully applied by Procter & Gamble to several challenging business problems. In these situations, it directly influenced managerial decision making and produced substantial cost savings. © 2010 Wiley Periodicals, Inc. Complexity, 2010     

Controlling the Cournot-Nash Chaos

The recently developing theory of nonlinear dynamics shows that any economic model can generate a complex dynamics involving chaos if the nonlinearities become strong enough. This study constructs a nonlinear Cournot duopoly model, reveals conditions for the occurrence of chaos, and then considers how to control chaos. The main purpose of this paper is to demonstrate that chaos generated in Cournot competition is in a double bind from the long-run perspective: a firm with a lower marginal production cost prefers a stable (i.e., controlled) market to a chaotic (i.e., uncontrolled) market, while a firm with a higher marginal cost prefers the chaotic market. Helpful remarks and comments by Ferenc Szidarovszky, Michael Kopel, Shahriai Yousefi, and three anonymous referees are gratefully acknowledged. Financial support from the Japan Ministry of Education, Culture, Sports, Science, and Technology, Grant-in-Aid for Scientific Research (B)15330037, and from Chuo University, Joint Research Grant 0382, is highly appreciated.     

Competitive outcomes in the cores of market games

The competitive outcomes of an economic system are known, under quite general conditions, always to lie in the core of the associated cooperative game. It is shown here that every “market game” (i.e., one that arises from an exchange economy with money) can be represented by a “direct market” whose competitive outcomes completely fill up the core. It is also shown that it can be represented by a market having any given core outcome as itsunique competitive outcome, or, more generally, having any given compact convex subset of the core as its full set of competitive outcomes.     

Rivalry and uncertainty in complementary investments with dynamic market sharing

We study the effects of revenue and investment cost uncertainty, as well non-preemption duopoly competition, on the timing of investments in two complementary inputs, where either spillover-knowledge is allowed or proprietary-knowledge holds. We find that the ex-ante and ex-post revenue market shares play a very important role in firms’ behavior. When competition is considered, the leader’s behavior departs from that of the monopolist firm of Smith (Ind Corp Change 14:639–650, 2005). The leader is justified in following the conventional wisdom (i.e., synchronous investments are more likely), whereas, the follower’s behavior departs from that of the conventional wisdom (i.e., asynchronous investments are more likely).     

Consensus reaching in committees

In this paper, we apply a consensus model to decision-making in committees that have to choose one or more alternatives from a set of alternatives. The model does not use a voting rule nor a set of winning coalitions. Every decision maker evaluates each alternative with respect to given criteria. The criteria may be of unequal importance to a decision maker. Decision makers may be advised by a chairman to adjust their preferences, i.e., to change their evaluation of some alternative(s) or/and the importance of the criteria, in order to obtain a better consensus. The consensus result should satisfy constraints concerning the consensus degree and the majority degree. A simple example is presented.     

Product concept and prototype flexibility in manufacturing: Implications for customer satisfaction

A rapidly changing competitive landscape and dynamic customer expectations require manufacturing firms to seek flexibility in product development. Product concept flexibility (i.e., developing design options) and product prototype flexibility (i.e., creating working models) emerge as effective ways to quickly develop new products that meet competitive challenges and satisfy customer demands. Product concept flexibility enables firms to fully explore various product definitions and ideas. Product prototype flexibility allows firms to gather customers’ feedback and investigate design feasibility. Using data from 273 manufacturing firms, this research tests mediating, moderating, and additive models that relate product concept flexibility, product prototype flexibility, and customer satisfaction. The results indicate that firms with high product concept flexibility are more likely to benefit from prototype flexibility than firms with low product concept flexibility, and that product concept flexibility and product prototype flexibility act independently and additively to predict customer satisfaction.     

Impact of quality on competitive advantage and organizational performance

Effective quality improvement has become a potentially valuable way of securing competitive advantage and improving organizational performance. This research conceptualizes and develops a framework that links quality, competitive advantage, and organizational performance. Data for the study were collected from 74 organizations and the relationships proposed in the framework were tested using structural equation modelling. The results indicate that quality improvement can lead to enhanced competitive advantage and improved organizational performance. The contribution of the paper is that it provides empirical support for direct and indirect effects of quality on organizational performance and competitive advantage in Tunisia.     

Computationally modeling organizational learning and adaptability as resource allocation: An artificial adaptive systems approach

A framework for and a computational model of organizational behavior based on an artificial adaptive system (AAS) is presented. An AAS, a modeling approach based on genetic algorithms, enables the modeling of organizational learning and adaptability. This learning can be represented as decisions to allocate resources to the higher performing organizational agents (i.e., individuals, groups, departments, or processes, depending on the level of analysis) critical to the organization's survival in different environments. Adaptability results from the learning function enabling the organizations to change as the environment changes. An AAS models organizational behavior from a micro-unit perspective, where organizational behavior is a function of the aggregate actions and interactions of each of the individual agents of which the organization is composed. An AAS enables organizational decision making in a dynamic environment to be modeled as a satisficing process and not as a maximization process. To demonstrate the feasibility and usefulness of such an approach, a financial trading adaptive system (FTAS) organization is computationally modeled based on the AAS framework. An FTAS is an example of how the learning mechanism in an AAS can be used to allocate resources to critical individuals, processes, functions, or departments within an organization.     

Nash implementation of competitive equilibria in the job-matching market

This paper studies Nash implementation in the job-matching market where each worker works for only one firm and a firm hires as many workers as it wishes. We show that the competitive equilibrium correspondence (CEC) is the smallest Nash implementable correspondence satisfying individual rationality and Pareto indifference. Furthermore, the CEC is the minimal monotonic extension of the worker-optimal and firm-optimal subcorrespondences. We offer two “good” mechanisms that implement this correspondence in Nash equilibrium.     

高维市场结构与创新

以往的创新研究局限于一维市场结构：所有企业的创新能力都一样，谁也不占有优势。实际上应根据企业不同的创新能力特征，分成若干种类型，形成高维市场结构，在此结构下研究创新竞争。本首先证明在高维市场结构下均衡点唯一；其次指出何种类型企业具有竞争优势，分析企业合资研究对竞争优势的影响；最后讨论竞争企业数量增加时均衡状态的变化，并将市场的结果与社会最优结果作比较。     

对相关市场条件下贸易竞争的博弈机制及福利效应的研究

在古诺双头模型的框架内分析了市场风险和相关因素对贸易竞争均衡和福利水平的影响.与传统模型不同,假设各国市场具有潜在相关的随机需求,且出口企业具有风险规避的态度,并利用博弈模型研究了市场风险和相关因子对竞争力和成本优势形成的产出效应及定价行为的影响.推论表明国际市场的不确定性和相关性削弱了企业在完全信息条件下参与贸易竞争的动机,而各国的福利水平则取决于企业风险态度、市场风险和相关系数的特定组合.