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A Niche Approach for Modeling Economic Competition.
Saverio Di Giorno1, Aura Reggiani2
1University of Naples Parthenope, Naples, Italy.
Nonlinear Dynamics, Psychology, and Life Sciences
|March 20, 2024
Summary
Economic niche models reveal market dynamics and firm competition. Simulation experiments show that market stability depends on firm configurations, supporting industrial district theory.
Area of Science:
- Economics
- Economic Modeling
- Industrial Organization
Background:
- Predator-prey models have a long history in economics, evolving from the Lotka-Volterra system.
- Previous models include business cycle, chaotic hysteresis, and renewable resource models.
- Neoclassical economic theory offers limited descriptions of interacting economic variables.
Purpose of the Study:
- To analyze economic competition mechanisms using niche models.
- To provide a richer description of interacting economic variables.
- To study firm dynamics and competition under varying market conditions.
Main Methods:
- Adoption of the unifying framework of niche models.
- Qualitative study of dynamic firm behavior.
- Discrete-time simulation experiments analyzing firm competition.
Main Results:
- The economic system exhibits different (in)stability patterns.
- Market stability is contingent on the configuration of firms within the market.
- Findings confirm the theory of industrial districts in Northeast Italy.
Conclusions:
- Niche models offer a more comprehensive framework for economic competition analysis.
- Firm interactions and market structure significantly influence economic stability.
- The study validates the applicability of industrial district theory in the studied region.
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