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http://dx.doi.org/10.5302/J.ICROS.2011.17.4.304

Supervisory Control of Dynamic Oligopolistic Markets: How can Firms Reach Profit-Maximization?  

Park, Seong-Jin (Ajou University)
Publication Information
Journal of Institute of Control, Robotics and Systems / v.17, no.4, 2011 , pp. 304-312 More about this Journal
Abstract
In an oligopolistic market, only a few firms account for most or all of total production, e.g., automobile, steel, and computer industries. For a dynamic oligopolistic market with two firms competing in quantities, we show that supervisory control theory of discrete event systems provides a novel approach to solve the dynamic oligopoly problem with the aim of maximizing the profits of both firms. Specifically, we show that the controllability, observability, and nonblocking property (which are the core concepts in supervisory control theory) are the necessary and sufficient conditions for two oligopolistic firms in disequilibrium to eventually reach equilibrium states of maximizing the profits of both firms.
Keywords
discrete event systems; supervisory control; dynamic oligopoly; finite state automata;
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Times Cited By KSCI : 1  (Citation Analysis)
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