The Market Structure Simulation of Heterogenous Firms
The paper aims at the need for economic policy evaluators to assess how and whether specific measures can influence the development of markets in a way that achieves greater wealth. Therefore, this study concentrates on well-documented firms’ heterogeneity that significantly impact their ability to...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
MDPI AG
2021-12-01
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| Series: | Economies |
| Subjects: | |
| Online Access: | https://www.mdpi.com/2227-7099/10/1/9 |
| _version_ | 1797494563321937920 |
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| author | Arūnas Burinskas Manuela Tvaronavičienė |
| author_facet | Arūnas Burinskas Manuela Tvaronavičienė |
| author_sort | Arūnas Burinskas |
| collection | DOAJ |
| description | The paper aims at the need for economic policy evaluators to assess how and whether specific measures can influence the development of markets in a way that achieves greater wealth. Therefore, this study concentrates on well-documented firms’ heterogeneity that significantly impact their ability to compete, influence the market structure, and decide to participate in trade. For the initial attributes and features of the simulated model, we chose Ottaviano demand function. However, we took a different approach regarding demand and its elasticities in the market by employing distributional functions to model the market demand and the demand for each firm’s product. Allowing for the evolution of the market structure, the model reveals the importance of endowment factors and suggests the crucial role of firms’ abilities to compete. What is more important—it affects the time needed for the market structure formation. Although the model does not track all the aspects of a firm’s heterogeneity, it might guide economic policy makers to not only support the business in increasing its capabilities but keep it struggling over the competition to impede the collecting of Ricardian rents. |
| first_indexed | 2024-03-10T01:36:07Z |
| format | Article |
| id | doaj.art-076861eac53c4fe9a722ac26235e4521 |
| institution | Directory Open Access Journal |
| issn | 2227-7099 |
| language | English |
| last_indexed | 2024-03-10T01:36:07Z |
| publishDate | 2021-12-01 |
| publisher | MDPI AG |
| record_format | Article |
| series | Economies |
| spelling | doaj.art-076861eac53c4fe9a722ac26235e45212023-11-23T13:31:58ZengMDPI AGEconomies2227-70992021-12-01101910.3390/economies10010009The Market Structure Simulation of Heterogenous FirmsArūnas Burinskas0Manuela Tvaronavičienė1Department of Business Technologies and Entrepreneurship, Vilnius Gediminas Technical University, Saulėtekio Av. 11, LT-10223 Vilnius, LithuaniaDepartment of Business Technologies and Entrepreneurship, Vilnius Gediminas Technical University, Saulėtekio Av. 11, LT-10223 Vilnius, LithuaniaThe paper aims at the need for economic policy evaluators to assess how and whether specific measures can influence the development of markets in a way that achieves greater wealth. Therefore, this study concentrates on well-documented firms’ heterogeneity that significantly impact their ability to compete, influence the market structure, and decide to participate in trade. For the initial attributes and features of the simulated model, we chose Ottaviano demand function. However, we took a different approach regarding demand and its elasticities in the market by employing distributional functions to model the market demand and the demand for each firm’s product. Allowing for the evolution of the market structure, the model reveals the importance of endowment factors and suggests the crucial role of firms’ abilities to compete. What is more important—it affects the time needed for the market structure formation. Although the model does not track all the aspects of a firm’s heterogeneity, it might guide economic policy makers to not only support the business in increasing its capabilities but keep it struggling over the competition to impede the collecting of Ricardian rents.https://www.mdpi.com/2227-7099/10/1/9dynamic efficiencymarket structuremodel simulationheterogeneous firms |
| spellingShingle | Arūnas Burinskas Manuela Tvaronavičienė The Market Structure Simulation of Heterogenous Firms Economies dynamic efficiency market structure model simulation heterogeneous firms |
| title | The Market Structure Simulation of Heterogenous Firms |
| title_full | The Market Structure Simulation of Heterogenous Firms |
| title_fullStr | The Market Structure Simulation of Heterogenous Firms |
| title_full_unstemmed | The Market Structure Simulation of Heterogenous Firms |
| title_short | The Market Structure Simulation of Heterogenous Firms |
| title_sort | market structure simulation of heterogenous firms |
| topic | dynamic efficiency market structure model simulation heterogeneous firms |
| url | https://www.mdpi.com/2227-7099/10/1/9 |
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