Evolutionary Game Theory With Application In Hypercompetition

Evolutionary game theory is the theory that mixes of game theory and dynamic evolutionary process. It differs from either game theory who pays attention to static equilibrium and comparable static equilibrium, or inchoate evolutionary game theory who ignores comparable static equilibrium. Evolutionary game theory comes from biology evolutionary theory. It has successfully explained many phenomenas in the biology evolutionary process, and obtained dazzling achievement in analysing the problem of social custom, criterion or system. Evolutionary game theory now has became an important analysis means and a new field in economics.This paper introduces the evolutionary game theory, and builds evolutionary game model to analyse the evolutionary stability of investment strategies in both general and hyper-competition environment. The anterior part of this paper uses evolutionary game models to re-describe the evolutionary equilibrium process in the classical cooperative-competitive game under both symmetrical and unsymmetrical situation. We get the conclusion that the final evolutionary state not only depends on the payoff parameter, but also relates to the initial state. The latter part analyses the evolutionary stability of investment strategies in the hyper-competition environment. First we describe the particularities of the hyper-competiton market, and then prove the feasibility of using evolutionary game theory in the hyper-competiton market. We add returns to scale and economies of scope to the Dlieep Hurry and Roch Parayre's model. At last we discuss a particular investment strategy—shadow options and get some useful conclusions.