Tracing the Transition Path between Optimal Strategies Combinations within a Competitive Market of Innovative Industrial Products

摘要

In several cases, a competitive market can be simulated by a game, where each company/opponent is referred to as a player. In order to accommodate the fact that each player (alone or with alliances) is working against some others' interest, the rather conservative maximin criterion is frequently used for selecting the strategy or the combination of strategies that yield the best of the worst possible outcomes for each one of the players. Under this criterion, an optimal solution is obtained when neither player finds it beneficial to alter his strategy, which means that an equilibrium has been achieved, giving also the value of the game. If conditions change as regards a player, e.g., because of either achieving an unexpected successful result in developing an innovative industrial product or obtaining higher liquidity permitting him to increase advertisement in order to acquire a larger market share, then a new equilibrium is reached. The identification of the path between the old and the new equilibrium points may prove to be valuable for investigating the robustness of the solution by means of sensitivity analysis, since uncertainty plays a critical role in this situation, where evaluation of the payoff matrix is usually based on experts' estimates. In this work, the development of a standard methodology (including 16 activity stages and 7 decision nodes) for tracing this path is presented while a numerical implementation follows to prove its functionality.