Abstract.
This paper describes the use of a genetic algorithm (GA) to model several standard industrial organisation games: Bertrand and Cournot competition, a vertical chain of monopolies, and a simple model of an electricity pool. The intention is to demonstrate that the GA performs well as a modelling tool in these standard settings, and that evolutionary programming therefore has a potential role in applied work requiring detailed market simulation. The advantages of using a GA over scenario analysis for applied market simulation are outlined. Also explored are the way in which the equilibria discovered by the GA can be interpreted, and what the market analogue for the GA process might be.
Article PDF
Similar content being viewed by others
Avoid common mistakes on your manuscript.
Author information
Authors and Affiliations
Rights and permissions
About this article
Cite this article
Price, T. Using co-evolutionary programming to simulate strategic behaviour in markets. J Evol Econ 7, 219–254 (1997). https://doi.org/10.1007/s001910050042
Issue Date:
DOI: https://doi.org/10.1007/s001910050042