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Article
Publication date: 5 June 2017

Mikhail Geraskin

This paper aims to consider the problem of determining the equilibriums on oligopoly market in case of Stackelberg leader (leaders) and reflexive behavior of market agents.

328

Abstract

Purpose

This paper aims to consider the problem of determining the equilibriums on oligopoly market in case of Stackelberg leader (leaders) and reflexive behavior of market agents.

Design/methodology/approach

This paper includes economic and mathematical modeling, optimization methods and game theory.

Findings

This paper explains models of reflexive games on oligopoly market, taking into account the diversity of agents’ reasoning about strategies of environing and equilibrium mechanisms for coincidence or opposition of agents’ reflexive reasoning on the same rank of reflection.

Research limitations/implications

This paper considers the oligopoly market with linear function of demand and costs of agents, the rational behavior of agents and the reflexive reasoning on the same rank of reflection. The set of agents’ reasoning about the environing strategies is considered as a set of market states for which the problem of agent’s optimal action choosing solves with the complete awareness.

Practical implications

Identification of reflexive behavior of environing allows agents to increase their market shares and profit.

Social implications

Oligopoly markets play a leading role in the world oil trade and reflexive behavior affects the market equilibrium.

Originality/value

In the paper, the mechanisms of equilibrium in reflexive games on the linear duopoly market for arbitrary rank reflection are developed.

Details

Kybernetes, vol. 46 no. 06
Type: Research Article
ISSN: 0368-492X

Keywords

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Article
Publication date: 4 May 2020

Mikhail Geraskin

This paper aims to investigate the problem of searching for the equilibrium in the housing market, the mortgage lending market and the insurance market in the process of selling…

216

Abstract

Purpose

This paper aims to investigate the problem of searching for the equilibrium in the housing market, the mortgage lending market and the insurance market in the process of selling the residential property. Three classes of markets are established in three modes, which reflect the interdependence of the firms’ interests in these markets through the parameters of their integration. The paper aims to determine the prices in these markets on the basis of the compromises among the conflicting interests of the related firms, and, in addition, to assess the rationality of integration for firms, which are participants in the process of selling the residential property.

Design/methodology/approach

On the basis of the revenue sharing contracts and the supply chain coordination methods, the optimization models of the housing realtor, the mortgage bank and the insurance company are developed. The models consider the interdependence of the firms’ interests, the monopolistic competition in these markets and the conditions of the firms’ individual rationality in the interaction process.

Findings

The results of the study are as follows. First, as a consequence of a decrease in the demand curves in monopolistic competition, the housing market, the mortgage market and the insurance market are interconnected, therefore, the optimization models of the firms in these markets are interdependent through the revenue sharing parameters. Second, in these markets the individual firms’ sales optimums are not identical, therefore, the interests of the firms are contradictory. Third, in the realtor-bank-insurer system, the equilibrium satisfies the condition of zero revenue sharing payments between the agents; additionally, the equilibrium prices in these markets are mutually independent. Fourth, in the disequilibrium, the prices in these markets are interrelated, i.e. the price in one market increases with the price in another market, if the payment is directed from the former to the latter, and vice versa.

Research limitations/implications

The results of the study are applicable in practice, if the markets demonstrate the decreasing demand curves and if the needs of buyers in related markets are interconnected.

Practical implications

The interaction between the realtor and the mortgage bank enables the realtor to raise its sales and the bank to increase in the number of loans, i.e. it leads to growth of their profits. The interaction between the insurer and the mortgage bank enables the insurer to increase in the number of policies and the bank to reduce the risk of lending, i.e. it leads to an increase in their profits. The identification of the individual firms’ sales optimums enables agents to determine the terms of the contracts of these interactions, which are compromises from the positions of each transaction participants. In addition, the firms’ optimums indicate the predictions of the equilibrium market prices.

Originality/value

In comparison with the studies in the contract theory framework, first, the mathematical description of the complicated (three-agent) system of interactions is proposed; second, the optimal choice non-linear models are developed, which take into account the non-linear demand functions in the monopolistic competition markets; third, the equilibrium of the agents with contradictory interests is investigated. In the later item, the authors establish that the revenue sharing contracts in the complimentary demands functions systems do not require the payments between the participants. Fourth, the authors prove that, in the equilibrium of these markets, the housing prices, the mortgage interest rates and the insurance rates are mutually independent and equal to the prices in the isolated markets.

Details

Kybernetes, vol. 50 no. 5
Type: Research Article
ISSN: 0368-492X

Keywords

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