César García-Díaz

Firm Entry Diversity, Resource Space Heterogeneity and Market Structure

Evolutionary explanations of market structures have usually focused on the selection pressures impacted by a number of factors such as scale economies, niche width, firm size and consumer heterogeneity. How selection processes work in markets is highly dependent on the available firm type variation at entry. In order to explore the implications of different degrees of firm diversity at entry on posterior market selection processes, we develop an agent-based computational model. Results indicate that a proper understanding of market selection processes should, indeed, involve understanding the effects of firm type variation at market entry.

Micro-Level Adaptation, Macro-Level Selection, and the Dynamics of Market Partitioning

This paper provides a micro-foundation for dual market structure formation through partitioning processes in marketplaces by developing a computational model of interacting economic agents. We propose an agent-based modeling approach, where firms are adaptive and profit-seeking agents entering into and exiting from the market according to their (lack of) profitability. Our firms are characterized by large and small sunk costs, respectively. They locate their offerings along a unimodal demand distribution over a one-dimensional product variety, with the distribution peak constituting the center and the tails standing for the peripheries. We found that large firms may first advance toward the most abundant demand spot, the market center, and release peripheral positions as predicted by extant dual market explanations. However, we also observed that large firms may then move back toward the market fringes to reduce competitive niche overlap in the center, triggering nonlinear resource occupation behavior. Novel results indicate that resource release dynamics depend on firm-level adaptive capabilities, and that a minimum scale of production for low sunk cost firms is key to the formation of the dual structure.

An Evolutionary Game Theory Approach to Modeling VMI Policies

The strategy of integration known as VMI (Vendor-Managed Inventory) allows the coordination of inventory policies between producers and buyers in supply chains. Based on a new proposed model for the implementation of VMI in a chain of two links composed of a producer and a buyer, this paper studies the evolution of individual strategies of the producer and the buyer by a formalism derived from the theory of evolutionary games. The conditions that determine the stability of evolutionarily stable strategies are derived and analyzed. Work results specify analytical conditions that favor the implementation of VMI on traditional chains without VMI.

POLITICAL SPACES, DIMENSIONALITY DECLINE AND PARTY COMPETITION

We built a computational model of political party competition in order to gain insight into the effect of the decrease in the number of relevant political issues (dimensions), and the change of their relative importance, on the number of surviving political parties, their strategy performance, and the degree of political party fragmentation. Particularly, we find that when there is a dimensionality reduction (i.e., a change from a two-dimensional issue space to a one-dimensional one, or, a substantial decrement in one of the issues relative importance with respect to the other), the number of political parties declines, as does the overall degree of party fragmentation in the system. Regarding party strategies, we observe that, after the dimensionality reduction, (i) the inert parties tend to improve their performance in terms of party numbers (i.e., more inert parties survive, relatively speaking); (ii) the population of large-size seekers declines, (iii) the few large-size seeker survivors, in general, cushion their increased mortality hazard with increased size (i.e., increased number of supporters); and, finally, (iv) the mortality hazard increases with distance to the mean voter spot.

The use of efficient cost allocation mechanisms for congestion pricing in data networks with priority service models

This paper demonstrates the application of two efficient cost allocation mechanisms on a simple FIFO network model in order to find congestion-based prices for network access services. It is shown that it is possible to obtain congestion-dependent prices in data networks (such as the Internet), establishing simultaneously different service quality levels among the users. The rationale behind these efficient distribution mechanisms is an axiomatic framework that determines a set of basic principles, highlighting the need for a fair allocation. Due to the characteristics of the price mechanisms and the possibilities of the parameter space in which these mechanisms might be applied, it is also shown that, in some cases, such mechanisms need additional weighting schemes in order to establish coherent differences among the service quality levels. In conclusion, even though the axiomatic framework guarantees efficient allocation, checking coherency in its use is left to the network manager.

Changing dimensionality of the political issue space : Effects on political party competition

We built an agent-based model of political party competition in order to explore the effect of the decrease in the number of relevant political issues on the number of political parties and the corresponding voter shares. We find that, when the space experiences a political shock and suddenly reduces in the number of dimensions, the number of political parties declines. We also observe that, after the shock, (i) the inert parties tend to improve their performance and that (ii) a few of the adaptive large size-seekers cushion their increased mortality hazard by locating in the zone with most intense competition (close to the political space center), which generates strong party size effects.