On Income Distribution Dynamic Competition Game Model

The game theory is about study on decision which the interdependent and direct interact decision maker's make and its equilibrium outcome. Popularly speaking, the game theory is one kind of "the game theory". In game, each player's utility function not only depend on his own chosen strategy but also depend on the other player's chosen strategies. Therefore, game theory is about research on the problem of individual choice in the condition of their exterior economy all existing. Game theory is about research on problem of individual choice in the condition of their exterior economy all existing. Game theory includes cooperation game and non-cooperation game, the game theory that economist now talk about generally refers to non-cooperation game. In social practice and life, there are many examples between the people decide behavior mutually affects, so the game theory is extensively applied. For example, production price competition or capacity level competition in the dual-oligopoly market.The oligopoly market is refers to the universal existence market construct that only have several competitive firms. In this market, the certain quantity firms which product perfectly substitutable commodities must consider other enterprises behavior strategies when he decide his own capacity level. Kreps and Scheinkman (1983) have established a two-stage game model.The model has proven under the oligopoly markets, in some situation of perfect information game which the two identical firms face a capacity competitive, Cournot equilibrium may exist in the price competition game with capacity constraint.This paper constructs two firms competitions through a dynamic competition game model, points out that in certain time and condition, although Cournot equilibrium is the dynamic competition game's equilibrium, but both want to drive its rival out of the market, so in some condition it want to increase capacity level, the most main reason lies in the different cost, namely the firm invest the technical development.Here not only involves to firm's utility function, but also use the time function. The paper elaborate the dynamic competition game equilibrium in the different situation, suppose the market is rigid demand and the demand function is relatively invariable, the new technical research and development result in the lower cost, the oligopoly market firm use the capital which transforms from income to obtain the higher production level or invest the new technology, go on the new price competition in the oligopoly markets. Thus the model elaborate the firm competition substantive, capital competition, namely how to more highly effectively use capital to gain higher profit than its rival.In the supposition condition frame, the article draws four main conclusions: first, the full symmetry enterprise achieves Cournot equilibrium in the competition; Second, along with the firm scale expansions, it will take more and more attention to the new technical investment; Third, the reason that firm breaks the Cournot equilibrium is the different useful capital efficiency, and the higher capital useful efficiency enterprise can finally win competition, thus obtains the high monopoly profit; Fourth, the article has show the condition that the firm will not drive its rival out of the market by increasing the quantity level in dynamic competitive game.