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Game Analysis of Competition and Cooperation Strategies in Agricultural Product Markets

By: Lijuan Zhang 1
1School of Economics and Management, Luoyang Institute of Technology, Luoyang, Henan, 471000, China

Abstract

In the modern market environment of agricultural products, the relationship between producers and marketers is becoming more and more complex, with competition due to conflict of interests and cooperation due to common market goals. In this paper, we use the evolutionary game theory to construct a model of competitive and cooperative strategy selection between agricultural producers and marketers, and analyze the strategy evolution path and stability conditions of both parties by establishing replicated dynamic equations. The study sets the normal revenue range of producers and marketers as 17000-30000, the excess profit range as 4500-8000, and the cooperative marketing cost range as 1300-2500, and utilizes Matlab R2017a to verify the numerical simulation. The results show that the system exists two evolutionary stabilizing strategies, i.e., (Competition, Competition) and (Cooperation, Cooperation), when both parties’ cooperation gain is greater than competition gain and the default cost is high enough; when the default cost is low, the system exists only one stabilizing strategy, i.e., (Competition, Competition). The simulation time is set to 0-50 units, and the initial cooperation ratio varies in the range of 0.2-0.8. Normal revenue, excess profit and cooperative marketing probability are positively correlated, while cooperation cost is negatively correlated with cooperation probability. The study shows that the evolutionary game theory can effectively explain the strategic choice behavior of agricultural marketing subjects and provide theoretical basis for the formulation of reasonable marketing cooperation strategies.