Balancing pairs of interfering elements

Carfì, David and Gambarelli, Gianfranco and Uristani, Angelo (2011): Balancing pairs of interfering elements.

Abstract

Many decisions in different fields of application have to take into account the joined effects of two elements that can interfere with each other. For example, in Industrial Economics the demand of an asset can be influenced by the supply of another asset, with synergic or antagonistic effects. The same happens in Public Economics, where two differing economic policies can create mutual interference. Analogously in Medicine and Life Sciences with drugs whose combined administration can produce extra damages or synergies. Other examples occur in Agriculture, Zootechnics and so on. When it is necessary to intervene in such elements, there is sometimes a primary interest for one effect rather than another. For example, if the importance of the effect of an element is ten times greater than the importance of the effect of another, then it is convenient to take this importance into consideration in deciding to what extent it should be employed. With this in mind, the model proposed here allows the optimal quantities of two elements that interfere with each other to be calculated, taking into account the minimum quantities to be allocated. Algorithms for determining solutions for continuous effects' functions are given, together with software specifically for the case of bilinear functions. It concludes with the presentation of applications particularly to economical problems.

• Item Type: MPRA Paper
• Language: English
• Keywords: Antagonist Elements; Interfering Elements; Optimal dosage; Combinations of interfering strategies; Synergies
• Subjects: D - Microeconomics > D2 - Production and Organizations > D21 - Firm Behavior: Theory; D - Microeconomics > D2 - Production and Organizations; C - Mathematical and Quantitative Methods > C7 - Game Theory and Bargaining Theory > C78 - Bargaining Theory ; Matching Theory; C - Mathematical and Quantitative Methods > C7 - Game Theory and Bargaining Theory > C71 - Cooperative Games; E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy > E23 - Production; C - Mathematical and Quantitative Methods > C7 - Game Theory and Bargaining Theory

References

Battaggion M. R., Grieco D. (2009). R&D Competition with Radical and Incremental Innovation, Rivista Italiana degli Economisti, 2.

Carfì, D. (2009) Payoff space in C1-games, Applied Sciences (APPS), vol.11, pp.1-16, ISSN 1454-5101 can be retrieved from http://www.mathem.pub.ro/apps/

Chandy R. K., Tellis G. J. (1998). Organizing for Radical Product Innovation: The Overlooked Role of Willingness to Cannibalize, Journal of Marketing Research, Vol. XXXV, 474-487

Gambarelli, G. (2007). Transforming Games from Characteristic into Normal Form, International Game Theory Review, Vol. 9, Number 1, 87-104

Nijssen E. J., Hillebrand B., Vermeulen P. A. M., Kemp R. (2004). Understanding the Role of Willingness to Cannibalize in New Service Development, Scales Research Reports H200308, EIM Business and Policy Research.