MEDIA NOTICE
CORRELATION researcher publishes paper about the fundamental physics of market share dynamics and group formation
Ottawa, January 15, 2024
(Link to PDF of this media notice)
How do corporate monopolies form? Under what circumstances can a new firm emerge and disrupt an entrenched order of old firms? What makes a market more or less volatile, and what are the chances a new firm will survive and become successful?
CORRELATION (correlation-canada.org) researcher Joseph Hickey, PhD has published a new paper in the peer-reviewed journal Physica A: Statistical Mechanics and its Applications that uses physics modeling to explore how markets of customers become divided up among competing firms.
Physicists use simple theoretical models to discover fundamental aspects of how complex natural systems behave and evolve, including social phenomena.
CORRELATION has recently used this modeling approach to study epidemiological circumstances, and showed that policies in which unvaccinated or elderly and vulnerable individuals are segregated from the rest of the population are not scientifically justified.
In his PhD work, Hickey showed that a simple model of interacting individuals reveals two basic parameters that control the structure and stability of a society: authoritarianism and violence of enforcement.
Similarly, Hickey’s new paper shows that two basic parameters are sufficient to explain the full spectrum of market types among competing firms, from absolute monopoly to a market with many small competing firms. The two parameters characterize fundamental characteristics of the market determined by the regulatory, technology, business culture and social environment in which the market operates.
The model can also be applied to the more general problem of group formation, including, for example, political parties competing for voter shares in elections, individuals’ choices of affiliation to ideologies or belief systems, and team or clique formation.
The article can be downloaded for free until February 27, 2024 at the following link: https://authors.elsevier.com/a/1iOW11M2-2IM%7E8.
The work was largely done as part of Dr. Hickey’s past employment at the Bank of Canada, prior to becoming President and Associate Researcher at CORRELATION.
CORRELATION is a registered not-for-profit organization conducting independent scientific research on topics of public interest, and is entirely funded by individual public donations.