Kiriakos Vlahos

Implications of regulation for entry and investment in the local loop

Abstract A number of countries around the world are trying to promote competition at the local loop as demand for higher bandwidth to the home increases. Different technologies (xDSL, cable modems, and wireless local loop) offer alternative solutions and the issue for regulators is to design a framework that promotes competition and investment. Regulators can promote competition in a number of ways, but two “pure” strategies are services and infrastructure competition. This paper models the regulator and incumbent–entrant interactions explicitly in order to understand how the structure of the voice services might evolve under different regulatory frameworks. Our analysis suggests that a “mix” of infrastructure and service competition like the one promoted in Netherlands, stimulates investment by incumbents and entrants alike and offers better consumer benefits. The message for policy makers is that the introduction of “sunset clauses” provides new entrants with strong incentives to invest while allowing them to enter in service competition and to acquire important knowledge about their new market.

Industry simulation: System modelling with an object oriented/DEVS technology

Abstract This paper describes results from a research project seeking to develop an object oriented modelling environment to facilitate the use of industry simulation models. The underlying motivation for this approach is first discussed and a new method is then compared to the more commonly used system dynamics framework. The major developments presented in this paper are: representation of the model as a hierarchical structure, distinction between different types of entities and relationships within the system; the time management of the modelling environment based on Zeiglers DEVS set theoretic formalism; and a model specification language built in Smalltalk. Finally an application to the UK electricity industry is reported and compared with an equivalent model in system dynamics. The OO/DEVS approach seems to offer several advantages for business policy analysis and strategy support.

OO/DEVS: a platform for industry simulation and strategic modelling

Abstract OO/DEVS is a software platform designed for industry modelling and simulation. By that we refer to the modelling of enterprises, their policies and their interaction in the marketplace with the aim to explore different industrial scenarios or alternative strategies. The framework exploits concepts from Object Oriented design and analysis, as well as the Discrete Event System Specification (DEVS) formalism, to support the development of natural, modular and reusable models. This paper provides an overview of OO/DEVS and discusses its implementation in Smalltalk. It also presents its graphical user interface that allows graphical model design and management.

Variable structure modelling of dynamic industry systems

This paper argues for and develops a variable structure modelling methodology, that is one which treats individual players in an industry as agents and provides the means for agent entry and exit as well as evolution of their behaviour. The resulting simulation framework extends traditional industry dynamics approaches and object oriented simulation, unifies a number of concepts from software engineering, artificial intelligence and knowledge engineering and provides a rich, rule-based specification for describing a wide range of structural changes. The framework allows the evolution of both structure and behaviour over time and is especially suited for modelling dynamic industries and markets that can endogenously change their own structure. We demonstrate the features and power of the modelling platform with a stylised model of competition that extends earlier work in evolutionary economics and allows for firm entry and exit and outline a description of a business application to the telecommunications industry.

Using Object-Oriented Simulation to Explore Substitution Between Technologies: An Application to the UK Mobile Telecommunications Industry

Abstract This paper discusses how an object-oriented simulation model can explore substitution processes in a competitive market. We show how a conceptual model of the UK mobile telecommunications industry, based on entities and their relationships, can be translated into a dynamic simulation model. The model focuses on two conflicting pressures, namely, the need to migrate customers from the analogue to the digital network versus the need to invest in expanding coverage and capacity of the digital network. The model allows an exploration of determinants of customer choice and how these can be affected by the strategies followed. Thus, management decision variables are endogenous to the model and there are feedback mechanisms between decisions and the migration speed. We examine different strategies for migrating customers from analogue to digital mobile networks and discuss the benefit of using such models.