Producer Competition and Cooperation Within the Infrastructure Sector of the Economy

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bstract

The present work is devoted to mathematical modeling of infrastructural branch of economy built on the scheme of vertical integration with competition. The paper develops a mathematical model, which is a normal-form game that is suitable for determining the optimal values of the most important parameters of the industry, such as the degree of its vertical integration, the output volume and price level of the natural monopoly core of the industry, which is a network enterprise.

To study various options for building the infrastructure industry, the article develops a methodology for the integrated application of game-theoretic capabilities of mathematical modeling and optimization capabilities of structural modeling of the industry based on the optimization of the integrated characteristics of the manufacturing and network sectors of the industry.

The paper shows that the main structural feature of the industries under consideration are fundamentally different characteristics of production costs of the producing and network sector. Therefore, the proposed game model of the industry is based on the use of the functions of production costs of both components of the industry. The game nature of the model makes it possible to investigate different variants of interaction between public and third-party private producers, to identify possible options for building stable agreements between them, which makes it possible to find the best option for meeting the requirements of the European Union’s Third Energy Package in the study of export opportunities for Russian infrastructure industries. The construction of the joint characteristics of the manufacturing and network sectors of the industry as payoff functions in the proposed game model allowed us to explore various options for integrating sectors.

As a result, an economically sound level of industry integration was found.

As a result of researches carried out according to the model proposed in the work, it was established that in the market of infrastructure industry there is a necessity of joint development of strategies of public and private producers, limits of possible variants of their cooperation are established.