The Economic Market Structure Based On Complexity

The pattern of"structure-conduct-performance" in the industry organization theory was proposed by Harvard economics school headed by Bain, which holded that market structure was the key to increase economic efficiency. Hence, the study on the market structure was of great significance.During the past 60 years, the main stream market structure theories have achieved great development, which could show the present situation and influence factors of market structure from different angles. But meanwhile, it also had disadvantages. On the one hand, many factors in traditional theories only reflected market situation from different aspects, which interacted each other and could not be analyzed independently. On the other hand, the conclusions also depended on the shape of supply-demand curve and the form of the function. Therefore, if these traditional theories of market structure were applied directly to complicated and changeable Chinese economic market, the research results often give rise to lively contention.With the emergence and development of complexity science, it was possible that economic researchs developed toward a comprehensive and systematic direction, and that the deficiency of the traditional market structure researches could be made up. As the market integrated feature, the complexity did not depend on other factors and existed independently, thus it could be used as a universal object to examine the market structure. Complexity researches could use a few parameters to describe complex distribution, so the obtained results were universal and were beneficial to resolve crucial issues.Therefore, the complexity equilibrium was represented via Kohmoto entropy, and the complexity characteristics of market structure were verified in this paper. The quantitative indicator of the complexity was also found out. The complexity values of Chinese market structure were obtained by using the fractal dimension. Then the relationship between the economic growth and the complexity of Chinese market structure were studied quantitatively. The multifractal method for synthetically measuring the complexity of market structure was proposed at last. Firstly, the complexity characteristics of market structure under complexity equilibrium were provided, and the research necessity was stated. By means of Kohmoto entropy relaxing the strict assumptions in general equilibrium theory, complexity equilibrium model was represented. The relationship, as well as the difference, between complexity equilibrium and general equilibrium were discussed and compared. It was proved that nonlinearity, hierarchy, adaptability, openness, dynamics, uncertainty, information deficiency and intelligence were the complexity properties of market structure. Thus a good foundation of the study on the complexity was laid.Secondly, the actual formation of Chinese market structure was investigated quantitatively, and the relationships between the economic growth and the complexity of Chinese market structure were studied. The fractal features of the market were confirmed. The quantitating index of complexity was expressed by the fractal dimension. The complexity values of the market structure in listed companies at Shanghai and Shenzhen were calculated. Their change trend was analyzed and compared at the same time. The relationships between the economic growth and the complexity of Chinese market structure were analyzed by using unit root test, cointegration theory and panel-data model. A series of valuable results were obtained.Finally, the method for synthetically measuring the complexity of the market structure was presented. Micro-elasticity and macro-elasticity were defined by regarding the market as a system. On this basis, the multifractal method for synthetically measuring the complexity of the market structure was proposed. Using the Legendre transformation between micro-elasticity and macro-elasticity to highlight the probability of different levels, the market structure could be analyzed hierarchically. The two-scale Cantor model verified that the multifractal measure was applicable to the market structure developing process. The multifractal measure provided a valuable theoretical reference for economic decision-making.