Control System and Market monopoly

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Hi , I am a master's student at Karlstad university Sweden . I want to do a thesis work in ' How to control market monopoly ' . For this project work i am supposed to apply my control knowledge to construct a regulator which will in turn control the profit made by monopolies . But i have no clue how to proceed in this work . So please let me know how can i proceed and how to find the mathematical model of monopoly system .

Pavan

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I would wander on over to the economics department and chat with a professor over there. There are a few more factors involved than you might imagine.

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Define "a few".

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Uh, well, lets see. In this case, I'll let "a few" mean exactly 8, if the

8 flops over onto its side.

Michael

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Pavan,

From the controls point of view it is very simple.

1 - Determine the amount of profit compared with the preferred (by you) amount of profit.

2 - Put a 100% tax on that profit.

There are a few problems with this approach:

1 - How measure the actual profit.

2 - How to determine a 'preferred' amount of profit.

3 - How to prevent the business from paying excess costs to other companies thus minimizing its own profit while maximizing the profit of the other companies.

4 - How to encourage the business to remain efficient since it is in its own interest to be inefficient.

The last point is what dooms practically all price control schemes.

Walter.

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If you plot the actual cash reserves associates with a project as a function of time, you get a classic response very similar to the boiler drum "swell" curve - ie money goes out in the early stages, then starts to come in again. The time to turn around is about 2-3 years in most cases. So the effects of a management decision does have dynamics, and can be presented as a differential equation.

Another control systems feature that most of the politicians and managers seem to ignore is "degrees-of-freedom" analysis. With one knob, you can regulate one variable - so trying to use interest rates to regulate unemployment AND inflation is a no-brainer.

Bruce.

bruce varley wrote:

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A controller can only work if it can influence the process it has to control in a predicable way. And it can only achieve feasible results not miracles. No monopoly (or any other economic) system can be controlled beyond the limits that the system will tolerate. Such monopolies rely on corruption selfishness and greed, applying controls means being nasty, not deploying good maths. The question seems to be a bit daft. It does not compute. It would be more interesting to ask whether tax rates could be automatically adjusted to achieve a desired result by a closed loop fiscal system and if so what the sample rate should be. What desired results might this work for?

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Not sure I agree completely with this last affirmation... there are many examples of "underactuated" systems which can be driven to desired stable points as long as there is some link between the variables; for instance a pendubot (two pendulum links) controled with just one motor in the first link. It might happen the same with unemployment and inflation as they can be linked in some obscure economical way I ignore.

Cheers,

/Manuel

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