Challenging the conventional belief that sophistication in strategy is always better, it was foundin W. Huang (2002a) that a price-taker who adopts the Cobweb strategy yields higher profitsthan those who adopt more sophisticated strategies. This study explores the possibility ofimproving further the relative profit advantage that the price-taker has over its counterpartsthrough incorporating the growth-rate adjustment strategy. A linear heterogenous oligopolymodel is used to illustrate the merits of such strategy in the case of disequilibrium. It is shownin theory and supported with numerical simulations that the adoption of growth-rate adjustmentstrategy together with price-taking strategy confers on the price-taker the stabilization powerin a dynamically unstable market in addition to better relative performance in terms of majorperformance measures.
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