Defending De-idealization in Economic Modeling: A Case Study

This paper defends the viability of de-idealization strategies in economic modeling against recent criticism. De-idealization occurs when an idealized assumption of a theoretical model is replaced with a more realistic one. Recently, some scholars have raised objections against the possibility or fruitfulness of de-idealizing economic models, suggesting that economists do not employ this kind of strategy. We present a detailed case study from the theory of industrial organization, discussing three different models, two of which can be construed as de-idealized versions of the first (the so-called Bertrand model of oligopoly). We conclude that recent pessimism about de-idealization in economics is largely unfounded, and that de-idealization strategies are not only possible but also widely employed in economics.

Equilibrium Further Studied for Combined System of Cournot and Bertrand: A Differential Approach

In general, quantity competition and price competition exist simultaneously in a dynamic economy system. Whether it is quantity competition or price competition, when there are more than three companies in one market, the equilibrium points will become chaotic and are very difficult to be derived. This paper considers generally dynamic equilibrium points of combination of the Bertrand model and Cournot model. We analyze general equilibrium points of the Bertrand model and Cournot model, respectively. A general equilibrium point of the combination of the Cournot model and Bertrand model is further investigated in two cases. The theory of spatial agglomeration and intermediate value theorem are introduced. In addition, the stability of equilibrium points is further illustrated on celestial bodies motion. The results show that at least a general equilibrium point exists in combination of Cournot and Bertrand. Numerical simulations are given to support the research results.

Effect of User Involvement in Supply Chain Cloud Innovation

Cloud innovation has become increasingly important to supply chain innovation and performance. User involvement is a crucial part of cloud innovation. However, the effect of user involvement in supply chain cloud innovation has not been thoroughly studied, particularly its effect on product cost and optimal price. In this paper, the authors attempted to bridge this major gap in the literature. The authors reviewed the relevant literature to define cloud innovation and user involvement in supply chain cloud innovation. Then the authors developed a game model based on the Bertrand model. Analysis of the model showed that user involvement affects product cost and optimal pricing in an interesting way. The authors also presented a real-life example of how user innovation takes place at Tailg electric vehicle company.

Spectrum Trading Analyze in the Spectrum Sharing Framework in Cognitive Radio Networks

The effective design of a cognitive radio network must take into account economic and technical aspects. This article presents a commercial formulation of the spectrum by the primary operators who decide to sell a part of their spectrum to a group of cognitive users in order to earn money and to promote the efficient use of the spectrum. Three systems of spectrum pricing are compared and suggested, such as the cooperative price based on the optimization of the profits, the market equilibrium, and the competitive prices focused on the competition of Bertrand. The Bertrand model examines the influences of certain parameters of the system such as the quality of the channel based on the Nash equilibrium and the substitutability of the spectrum. The differences in the various aspects of these systems of pricing are presented through the graphs. The authors note through the obtained result that the profit of the primary operator depends not only on the demand quantity of the spectrum but also on the behavior of the primary operators.