Toward a fuzzy theory of oligopolistic competition

Abstract

Demonstrates how fuzzy mathematics can be utilized to achieve a clearer perspective of the long-run equilibrium of oligopolistic firms than is provided by models based strictly on crisp numbers. It accomplishes this objective by computing the fuzzy present value of lost opportunities of entrepreneurs. By linking the optimal fuzzy opportunity to the cost function of the oligopolist, a long-run equilibrium is obtained, which provides an efficiency that is generally believed by economists to be realized only under perfectly competitive market conditions. The fuzzy sets which are shown to generate a crisp long-run equilibrium outcome under true-to-life competitive conditions provide an integral mathematical tool for modeling economic decision-making in an entrepreneurial business world.