Econophysical Applications for Economic Progress: Monopoly and Competition Cases

Abstract

This study attempts to investigate the relationship between monopoly and competition and the philosophy of progress, using the methods, models, and terms from physics. The term “progress” is a newly adopted term and is defined as the value of an increase in the production rate per unit of time. It is shown that to achieve progress, it is necessary to increase the production on a non-linear basis over time. Therefore, it is enough to have many firms that interact with each other under the influence of “market forces”. It is important to have a high level of university education, a legal environment for competition and indestructible antitrust laws. Even without strong science, you can make progress by acquiring technology and creating conditions for competition in the market. A factor that strongly influences progress, of course, is technology. For the development of technology, there is a great need for science. Science is a very powerful factor that affects the non-linear change in the economic development. It is shown that during the transition period from an absolute monopoly to an imperfect monopoly the system becomes more complex, and its output characteristics become non-linear as a function of time. It was found that the relationship between monopoly and competition is very simple, and there is no contradiction between them. Initially, the market is born as a monopoly, and then with the creation of similar firms, competition, as the natural market process, begins between them.