The Research Of Complex Network Evolution Of Price Ollusion Behavior

Collusion is a long-standing political and economic activity, collusion between organizationsfrom the early development of various forms of cartel to the modeling business practices andconspiracy decisions under dynamic game framework. Generally, under the environment of marketcompetition, because of the existence of the prisoner’s dilemma, the competitors cooperate witheach other to raise prices to get high yield possible only in small groups, less oligopolistic situation.For a large group of the large number of enterprises, the traditional theory holds that the fierce pricecompetition will lead to the existence of the price downward trend, especially with the growingpopulation size, downward price trend will be more obvious, the enterprise will have moremotivation initiative lower prices, resulting in price collusion among competitors is difficult toachieve. But at the same time, we also found that in large groups will have an upward pricemechanism, and this price behavior is without formal negotiation. Such as small amount ofagricultural products, part of Chinese herbal medicine, express delivery business, cooking oil pricecollusion phenomenon in competitive industries common occurrences. Price collusion as a lessstable cooperation between enterprises, in the interactive process will have a lot of factors causingenterprises choose to deviate from collusion. Therefore, we investigate the large-scale groupenterprise price collusion behavior evolution is a supplement to the traditional price formationmechanism, is a new explanation to the phenomenon of the price game of prisoner’s dilemma, hasvery important significance for the situation to control the market.In order to investigate the mechanism of spontaneous price collusion among competitors, thispaper from a theoretical point of view, the general rule is derived to model of enterprise pricecompetition activities of traditional competitive environment, And further introduces the complexnetwork, build a close to the realistic mathematical models and two kinds of price strategy updatestandard. According to the basic hypothesis of this paper, the use of computer MATLAB modelingand simulation analysis of small world networks and the scale-free network, based on the differenceof neighbors corporate earnings and individual price performance and composition at different priceupdate strategy group behavioral trends. We investigated the effect of number of enterprises andindividual memory length on the network group price of evolutionary game. The results show thatthe non duopoly market environment, due to the production of similar products of differentcompanies share market share gains are not the same, the motivation based on the present value ofthe pursuit of profit maximization, the demand was positively correlated with the timing or whenthe seasonal fluctuations in demand, companies are able to achieve spontaneity price collusion, and the size of the number of firms in the industry will affect the production of collusion. And in thecontext of the enterprise price behavior placed in specific assumptions complex networks, andfound that when the maximum income standard reference neighbor enterprise, the network groupprices quickly converge quickly to achieve a stable equilibrium price collusion (ie network thehighest price); when the average yield round price adjustment on the reference neighbor enterprises,companies tend to unify the final price, and this trend will be gradually increased, but the longer theconvergence time. Furthermore, in the small world network structure, the number of firms andindividual memory length on price collusion groups will have a minor impact, and in scale-freenetworks context, is basically no effect.By results of this study can be seen, when the competing networks to meet the specificassumptions of price collusion in the large-scale network can be realized. The network structure andthe specific environmental conditions have different influence on the evolution direction of price.This article through the neighbor effect analysis, it is proved that in some special assumptions, largegroups will form a spontaneous collective action, resulting in product prices to generate upwardtrend, so the original theory of collective action to improve and supplement.