Discussion papers

CPM-94-02 - 1 September 1994

Evaluating Competitive Strategies

Scott Moss, Huw David Dixon and Steve Wallis

Published as: Moss, S., Dixon, H. D. and Wallis, S. (1995): Evaluating Competative Strategies. Intelligent Systems in Accounting, Finance and Management, 4, 245-258.

This paper has three purposes. The first is to introduce a conception of learning which is a natural extension of economists’ representations of learning and which is natural to develop using KBS technology. The second is to demonstrate a particular form of KBS in which rule conditions and actions are well formulated formulae of first-order predicate logic (FOPL). A consequent feature of the use of such a KBS in modelling behaviour is that the simulation results obtained from these models are no less analytical than those of pure analytic models. The third purpose of this paper is to report an experimental design for simulations of competative behaviour which eliminates implicit bias in the selection of possible behaviours. The system is applied to the Cournot duolopy model. We find that modest intelligence on the part of at least one duopolist systematically increases the profits of both.