An empirical study on the Lanchester model of combat for competitive advertising decisions

This paper presents an empirical study on the Lanchester model of combat for competitive advertising decisions. Three issues are evaluated: (i) the specification of the market share response model; (ii) the effect of inflation on the estimation of the response model; and (iii) the performance of competitive strategies. It is shown that (a) the square root function that is used in previous studies is often inappropriate to characterize the market share response model; (b) market share variations are more responsive to current advertising expenditures; (c) closed-loop Nash equilibrium strategies are better competitive advertising strategies for firms to maximize profits than open-loop Nash equilibrium strategies; and (d), finally, general perfect equilibria Nash equilibrium strategies developed by Case are usually not good competitive advertising strategies for firms to maximize profits.     

Modeling of vehicular traffic system

The behavior of traffic systems controlled by traffic lights on a single lane is presented using the optimal velocity model. The effect of different traffic light control strategies on the traffic flow is discussed using three different strategies, i.e. the synchronized, green wave, and random offset. Some simulation results on the model using cellular automata are presented. The flow-density diagrams are analyzed using these strategies. (© 2008 WILEY-VCH Verlag GmbH & Co. KGaA, Weinheim)     

Challenge Versus Exchange in Collective Decision Making: A Comparison of Two Simulation Models Based on Simulated Data

In collective decision making, actors can use different influence strategies to get their way. Differences in influence strategies may, or may not, be connected to differences in collective outcomes. This research studies two influence strategies: the exchange strategy and the challenge strategy. In the existing literature, these strategies are analyzed and compared using simulation models in which actor behavior regarding influence attempts based on one of the strategies is modeled explicitly. Until now, these models have been tested only empirically on limited data sets. However, a theoretical test is necessary to gain more precise insights in the effect of characteristics of collective decision making situations on the collective outcomes. In the present research, computer simulations are used in a structured comparison of two competing models (the iterative exchange model and challenge model). The analyses show that the outcomes of both models are captured for a large part in the actor characteristics on the issues. Besides this, the expected directions of challenges and exchanges play a major part in explaining the outcomes of the models. This research shows that the use of simulated data allows a structured search of the input space, which led to new insights into the iterative exchange model and challenge model, and therefore in the exchange strategy and the challenge strategy.     

Robust strategies for natural gas procurement

In order to serve their customers, natural gas local distribution companies (LDCs) can select from a variety of financial and non-financial contracts. The present paper is concerned with the choice of an appropriate portfolio of natural gas purchases that would allow a LDC to satisfy its demand with a minimum tradeoff between cost and risk, while taking into account risk associated with modeling error. We propose two types of strategies for natural gas procurement. Dynamic strategies model the procurement problem as a mean-risk stochastic program with various risk measures. Naive strategies hedge a fixed fraction of winter demand. The hedge is allocated equally between storage, futures and options. We propose a simulation framework to evaluate the proposed strategies and show that: (i) when the appropriate model for spot prices and its derivatives is used, dynamic strategies provide cheaper gas with low risk compared to naive strategies. (ii) In the presence of a modeling error, dynamic strategies are unable to control the variance of the procurement cost though they provide cheaper cost on average. Based on these results, we define robust strategies as convex combinations of dynamic and naive strategies. The weight of each strategy represents the fraction of demand to be satisfied following this strategy. A mean–variance problem is then solved to obtain optimal weights and construct an efficient frontier of robust strategies that take advantage of the diversification effect.     

线上零售商销售策略差异性分析及策略组合优化模型

随着线上零售业的快速发展,线上零售策略优化研究对提高线上零售商决策水平,维持线上零售业继续健康发展具有积极意义.在概述关于线上零售策略优化已有研究成果的基础上,利用数学方法严格解析了两种常用销售策略之间的联系和差异,在考虑冲量(市场份额)对消费者线上购买行为和销售量的影响的条件下,建立了线上零售商销售策略组合优化问题的非线性混合整数规划模型,并基于模型分析了零售商应该采用的销售策略优化方案.     

A global MILP model for FMS scheduling

Flexible manufacturing systems (FMS) require intelligent scheduling strategies to achieve their principal benefit — combining high flexibility with high productivity. A mixed-integer linear programming model (MILP) is presented here for FMS scheduling. The model takes a global view of the problem and specifically takes into account constraints on storage and transportation. Both of these constrained resources are critical for practical FMS scheduling problems and are difficult to model. The MILP model is explained and justified and its complexity is discussed. Two heuristic procedures are developed, based on an analysis of the global MILP model. Computational results are presented comparing the performance of the different solution strategies. The development of iterative global heuristics based on mathematical programming formulations is advocated for a wide class of FMS scheduling problems.     

Strong equilibria of a repeated game with randomized strategies

A version of Aumann's (1976) model of a repeated game with randomized strategies is studied. The pure strategy set of each player is assumed to be a compact metric spacnd complexities due to the information structures are explicitly handled. It is shown that one can extend Aumann's argument to this setup and still prove the Aumann Proposition on equivalence of the β-core of a one-shot game with correlated strategies and the strong equilibrium utility allocations of the associated repeated game with randomized strategies. To this extended version of the Aumann Proposition, the author's theorem for nonemptiness of the β-core with correlated strategies is applicable, so this version is non-vacuous.     

Feedback Competitive Advertising Strategies with a General Objective Function

We introduce a general objective function, which incorporates competitive situations, such as conservative, punitive, and predatory advertising. Linking together the particular situations into a two-parameter family of max–min problems, and using the Lanchester model to describe the dynamics of the market, a bilinear-quadratic differential game is obtained. For this game, we find saddle-point feedback time-invariant advertising strategies and show when these strategies are Nash equilibrium strategies. In an empirical application involving duopolistic competition in the cola market, we find evidence of a punitive motivation for the advertising strategies.     

Almost sure Nash equilibrium strategies in evolutionary models of asset markets

We consider a stochastic model of a financial market with long-lived dividend-paying assets and endogenous asset prices. The model was initially developed and analyzed in the context of evolutionary finance, with the main focus on questions of “survival and extinction” of investment strategies. In this paper we view the model from a different, game-theoretic, perspective and examine Nash equilibrium strategies, satisfying equilibrium conditions with probability one.     

On the stability of evolutionary dynamics in games with incomplete information

In an interaction it is possible that one agent has features it is aware of but the opponent is not. These features (e.g. cost, valuation or fighting ability) are referred to as the agent’s type. The paper compares two models of evolution in symmetric situations of this kind. In one model the type of an agent is fixed and evolution works on strategies of types. In the other model every agent adopts with fixed probabilities both types, and type-contingent strategies are exposed to evolution. It is shown that the dynamic stability properties of equilibria may differ even when there are only two types and two strategies. However, in this case the dynamic stability properties are generically the same when the payoff of a player does not depend directly on the type of the opponent. Examples illustrating these results are provided.     

Randomized stopping games and Markov market games

We study nonzero-sum stopping games with randomized stopping strategies. The existence of Nash equilibrium and ɛ-equilibrium strategies are discussed under various assumptions on players random payoffs and utility functions dependent on the observed discrete time Markov process. Then we will present a model of a market game in which randomized stopping times are involved. The model is a mixture of a stochastic game and stopping game. Research supported by grant PBZ-KBN-016/P03/99.     

The golden rule when preferences are time inconsistent

We investigate the classical Ramsey problem of economic growth when the planner uses non-constant discounting. It is well-known that this leads to time inconsistency, so that optimal strategies are no longer implementable. We then define equilibrium strategies to be such that unilateral deviations occurring during a small time interval are penalized. Non-equilibrium strategies are not implementable, so only equilibrium strategies should be considered by a rational planner. We show that there exists such strategies which are (a) smooth, and (b) lead to stationary growth, as in the classical Ramsey model. Finally, we prove an existence and multiplicity result: for logarithmic utility and quasi-exponential discount, there is an interval I such that, for every k in I, there is an equilibrium strategy converging to k. We conclude by giving an example where the planner is led to non-constant discount rates by considerations of intergenerational equity.     

Playing off-line games with bounded rationality

We study a two-person zero-sum game where players simultaneously choose sequences of actions, and the overall payoff is the average of a one-shot payoff over the joint sequence. We consider the maxmin value of the game played in pure strategies by boundedly rational players and model bounded rationality by introducing complexity limitations. First we define the complexity of a sequence by its smallest period (a nonperiodic sequence being of infinite complexity) and study the maxmin of the game where player 1 is restricted to strategies with complexity at most n and player 2 is restricted to strategies with complexity at most m. We study the asymptotics of this value and a complete characterization in the matching pennies case. We extend the analysis of matching pennies to strategies with bounded recall.     

Modelling approach for biological control of insect pest by releasing infected pest

Models of biological control have a long history of theoretical development that have focused on the interactions between a predator and a prey. Here we have extended the classical epidemic model to include a continuous and impulsive pest control strategies by releasing the infected pests bred in laboratory. For the continuous model, the results imply that the susceptible pest goes to extinct if the threshold condition R₀ < 1. While R₀ > 1, the positive equilibrium of continuous model is globally asymptotically stable. Similarly, the threshold condition which guarantees the global stability of the susceptible pest-eradication periodic solution is obtained for the model with impulsive control strategy. Consequently, based on the results obtained in this paper, the control strategies which maintain the pests below an acceptably low level are discussed by controlling the release rate and impulsive period. Finally, the biological implications of the results and the efficiency of two control strategies are also discussed.     

Warmstarting the homogeneous and self-dual interior point method for linear and conic quadratic problems

We present two strategies for warmstarting primal-dual interior point methods for the homogeneous self-dual model when applied to mixed linear and quadratic conic optimization problems. Common to both strategies is their use of only the final (optimal) iterate of the initial problem and their negligible computational cost. This is a major advantage when compared to previously suggested strategies that require a pool of iterates from the solution process of the initial problem. Consequently our strategies are better suited for users who use optimization algorithms as black-box routines which usually only output the final solution. Our two strategies differ in that one assumes knowledge only of the final primal solution while the other assumes the availability of both primal and dual solutions. We analyze the strategies and deduce conditions under which they result in improved theoretical worst-case complexity. We present extensive computational results showing work reductions when warmstarting compared to coldstarting in the range 30–75% depending on the problem class and magnitude of the problem perturbation. The computational experiments thus substantiate that the warmstarting strategies are useful in practice.     

Evolution of innovation and its strategies: from ecological niche models of supply chain clusters

Generally, supply chain cluster (SCC) evolution follows innovation and its selection strategies. To further reduce the innovation risk, SCC must seek the feasible innovation strategies to match ecological niche-matching degree; within a competing cluster, it should avoid the hazardous nature of pure competition that affects the innovation output, and within a cooperation innovation cluster it should look carefully for the cooperation innovation mechanism. This paper examines the impact of growth of SCC from a perspective of ecological niche, the innovation strategy and the expansion of ecological niche, and its matching degree on the influence of the growth in SCC; and presents the ecological niche expansion model, growth model and growth evolution model of SCC. The findings of this research suggest that there is a five-stage evolution of which the characteristic is different in different innovation strategies. The ecological niche width of SCC is connected by each member’s ecological niche, and the expansion process is constituted by the members’ ecological niche expansion. In each stage, SCC should identify ecological niche-matching degree between members and innovation modes when the SCC expands the niche width to a certain limit. Finally, a case study demonstrates the application potential of the model and its implications.     

Complicated endemics of an SIRS model with a generalized incidence under preventive vaccination and treatment controls

In this paper, we propose and study an SIRS epidemic model that incorporates: a generalized incidence rate function describing mechanisms of the disease transmission; a preventive vaccination in the susceptible individuals; and different treatment control strategies depending on the infective population. We provide rigorous mathematical results combined with numerical simulations of the proposed model including: treatment control strategies can determine whether there is an endemic outbreak or not and the number of endemic equilibrium during endemic outbreaks, in addition to the effects of the basic reproduction number; the large value of the preventive vaccination rate can reduce or control the spread of disease; and the large value of the psychological or inhibitory effects in the incidence rate function can decrease the infective population. Some of our interesting findings are that the treatment strategies incorporated in our SIRS model are responsible for backward or forward bifurcations and multiple endemic equilibria; and the infective population decreases with respect to the maximal capacity of treatment. Our results may provide us useful biological insights on population managements for disease that can be modeled through SIRS compartments.     

On the stability of evolutionary dynamics in games with incomplete information

In an interaction it is possible that one agent has features it is aware of but the opponent is not. These features (e.g. cost, valuation or fighting ability) are referred to as the agent’s type. The paper compares two models of evolution in symmetric situations of this kind. In one model the type of an agent is fixed and evolution works on strategies of types. In the other model every agent adopts with fixed probabilities both types, and type-contingent strategies are exposed to evolution. It is shown that the dynamic stability properties of equilibria may differ even when there are only two types and two strategies. However, in this case the dynamic stability properties are generically the same when the payoff of a player does not depend directly on the type of the opponent. Examples illustrating these results are provided.     

A production system model of hunter-gatherer resource scheduling adaptations

Flannery has suggested that the shift from a hunter-gatherer economy to one based upon incipient agriculture requires a gradual rescheduling of the groups' resource acquisition activities. Here, concepts from Artificial Intelligence and Adaptive Systems are used to develop a model of prehistoric hunter-gatherer decision-making in the valley of Oaxaca, Mexico. This decision-making system was then used to answer the following questions:

1. 1. Given randomly specified strategies and no initial knowledge of what available rescheduling decisions will improve performance, can the system produce changes that lead to a mix of strategies that correspond to those used by hunter-gatherers in the valley prior to the introduction of incipient agriculture?

2. 2. How would the system adjust its' resource acquisition strategies in response to the introduction of techniques for incipient agriculture?

It is suggested that this basic model is able to explain a significant percentage of the changes in resource use seen in the archaeological record for the site.