Présentation MP-RP
Transcript of Présentation MP-RP
Castiaux & Timsit AIMS 2011 1
Market or resources,What impact on performance?
An approach through multi-agent simulations
Annick Castiaux1 and Jean-Philippe Timsit2
1University of Namur, Belgium2Centre de Recherche Public Henri Tudor, Luxembourg
[email protected]@tudor.lu
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Context
The larger objective:
– Using multi-agent simulations to offer a bridge the gap between theoretical works and empirical results
The original question:
– Which strategic model - RBV or IO - does lead to the highest performance?
The final question(s):
– Resource-push or Market-pull?
– de alio or de novo?
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Research questions
This study compares the performances obtained by firms following both their entry mode and their entry strategy:
– The entry mode – entry status – differentiates de novo and de alio firms;
– The entry strategy can be either pulled by the perceived market performance (Market-Pull, MP) or pushed by the firm's pool of resources (Resource-Push, RP)
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Entry Modes: de Novo and de Alio Firms
The entry on a new market plays a very important in industrial economics and in strategic management
-Klepper & Simons (2000)
de novo and de alio differ mainly by their market entry conditions, their behavior on this market and thus their fate
-Khessina et Carroll (2008)
However, the precise mechanisms though which entry mode can lead to over-performances remain unclear
-Fan (2010)
Differences in resource pools are intrinsic to the nature of de novo and de alio firms. As a matter of fact, de alio firms emerge from the diversification of a parent firm. The parent firm decides to enter a market not by itself but by creating another organization.
-Carroll et al. (1996)
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Entry Strategies: Resources and Markets
"For the firm, resources and products are two sides of the same coin“
-Wernerfelt (1984)
The foundations of the IO model are based on the paradigm Structure-Conduct-Performance.
-Mason (1939; 1957) and Bain (1951; 1968)
The resource-based theory takes its origins in the work of Penrose. (1955, 1959)
The firm is composed of resources that constitute its substance.
-Penrose (1959) and Wernerfelt (1984)
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Method
Simulating through a multi-agent system the interaction between : Firms characterized by
� An entry mode (DN or DA) simulated by different initial pools of resources
� A strategic orientation (RP or MP) leading to different conditions of market choice
� Pools of resources varying following sales and purchases
� Financial assets
Markets characterized by
� Entry barriers (assets required to enter the market)
� A size (number of market shares)
� A market share value depending on the competition intensity
A strategic factors market
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Model
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Computing the performance of a given firm i :
et
Choosing market j following strategic orientation :
MP :
RP :
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Algorithm
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Parameters
200 firms interacting with 20 markets
1046 simulations of 200 cycles each
Recording every 10 cycles of Number of firms of each type (MP, RP ; MPDN, MPDA, RPDN, RPDA) among the
10 best performing firms
Number of surviving firms of each type
Total performance of the best firm of each type
Average performance of the 5 best performing firms from each type
Average performance of the 10 best performing firms from each type
Average performance of all surviving firms of each type
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10 20 30 40 50 60 70 80 90 100 110 120 130 140 150 160 170 180 190 2000
1
2
3
4
5
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7
8
9
10
MP RP
Simulation cycles
Nu
mb
er
in b
est
10
10 20 30 40 50 60 70 80 90 100 110 120 130 140 150 160 170 180 190 2000
1
2
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10
MPDN MPDA RPDN RPDA
Simulation cycles
Nu
mb
er
in b
est
10
10 20 30 40 50 60 70 80 90 100 110 120 130 140 150 160 170 180 190 2000%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
MPDN MPDA RPDN RPDA
Simulation cycles
Le
ad
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hip
in a
ll si
mu
latio
ns
(a.2)
(b.2)
(a.1)
(a) Number of firms of each type present in the 10 best performing firms
(b) Percentage of simulations where a given type is predominant in 10 best performing firms
10 20 30 40 50 60 70 80 90 100 110 120 130 140 150 160 170 180 190 2000%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
MP RP
Simulation cycles
Le
ad
ers
hip
in a
ll si
mu
latio
ns
(b.1)
Which types of firms in the 10 best ones?
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0 20 40 60 80 100 120 140 160 180 2000
20
40
60
80
100
120
Simulation cycles
Nu
mb
er
of s
urv
ivin
g fi
rms
MP firms
RP firms
0 20 40 60 80 100 120 140 160 180 2000
10
20
30
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60
Simulation cycles
Nu
mb
er
of s
urv
ivin
g fi
rms MPDA firms
MPDN firms
RPDN firms
RPDA firms
Survival of firms following in each population(a) (b)
Survival rate of firms following their type
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0 20 40 60 80 100 120 140 160 180 2000
1000
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5000
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7000
Simulation cycles
Ave
rag
e p
erf
orm
an
ce (
a.u
.)
0 20 40 60 80 100 120 140 160 180 2000
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7000
Simulation cycles
Ave
rag
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a.u
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0 20 40 60 80 100 120 140 160 180 2000
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7000
Simulation cycles
Ave
rag
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a.u
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0 20 40 60 80 100 120 140 160 180 2000
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7000
Simulation cycles
Ave
rag
e p
erf
orm
an
ce (
a.u
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MP firm
RP firm
MP firms
RP firms
(a) Average performance of best firm in each type
(b) Average performance of the 5 best firms in each type
(a.2)(a.1)
(b.1) (b.2)
RPDN firm
MPDA firm
MPDN firm
RPDA firm
RPDN firms
MPDN firms
MPDA firms
RPDA firms
Performance evolution following firm type
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0 20 40 60 80 100 120 140 160 180 200
-2000
-1000
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1000
2000
3000
4000
5000
Simulation cycles
Ave
rag
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a.u
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(c) Average performance of the 10 best firms in each type
0 20 40 60 80 100 120 140 160 180 2000
1000
2000
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4000
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6000
Simulation cycles
Ave
rag
e p
erf
orm
an
ce (
a.u
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0 20 40 60 80 100 120 140 160 180 2000
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2000
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Simulation cycles
Ave
rag
e p
erf
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an
ce (
a.u
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(c.2)(c.1)
MP firms
RP firms RPDN firms
MPDN firms
RPDA firms
MPDA firms
0 20 40 60 80 100 120 140 160 180 200
-1000
0
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Simulation cycles
Ave
rag
e p
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a.u
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(d) Average performance of all firms in each type
MP firms
RP firms
(d.1) (d.2)
RPDN firms
MPDN firmsRPDA firms
MPDA firms
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Discussion
Higher performance of RP firms Performance accumulation thanks to a higher stability
Luck factor: Initial compliance with a high-profit market
The majority of highly performing RP firms are de novo Higher flexibility in their initial choice
More opportunities to find an attractive market
Low survival rate of RP firms, especially de alio RP firms Difficulty to move to another market if no profit
For some of them, no market corresponding to their assets is found
Exceptional survival rate of MP firms, especially de alio MP firms Flexibility to choose any market, even more if they have a lot of resources
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Conclusions
Simulation method
Opportunities Limits
Future projects
Change of strategy Resources variability Innovation ...
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Thank you for your attention
Questions and comments ?
[email protected]@fundp.ac.be