Competition and welfare for a stochastically fluctuating market with irreversible decisions

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Abstract

The present paper, in the sprit of econophysics, attempts to shed new light on the aspect that was missed in the traditional economic analysis. More precisely, the present paper combines the optimal stopping model and the economic model into a single structure and examines the relationship between the competition and the welfare, which has been a major focus of the recent economic analysis. The main finding is that in a stochastically fluctuating small market, suppression of the competition increases the growth rate of the welfare-stochastic version of the 'excess entry theorem.'.

Original languageEnglish
Pages (from-to)2846-2850
Number of pages5
JournalPhysica A: Statistical Mechanics and its Applications
Volume387
Issue number12
DOIs
Publication statusPublished - 2008 May 1

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Keywords

  • Excess entry theorem
  • Homogeneous products
  • Irreversible decision
  • Optimal stopping theory

ASJC Scopus subject areas

  • Mathematical Physics
  • Statistical and Nonlinear Physics

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