Assessing predator-prey model(s) for competing corporations

Abstract

As companies compete, in any business sector, the interactions affect the availability of resources needed for their growth. The question of whether one business entity dominates the industry or grows only to a limited extent often arises. In this study, we adopted and adapted the Lotka-Volterra model of predator-prey dynamics to investigate competition between business corporations. The formulated model was applied to existing market share and stock exchange share prices data to analyse the relationships between pairs of companies from the same industry. Numerical techniques were employed in the estimation of model parameters. Empirical studies focused on corporations from three different business sectors. The results reveal different relationships, namely mutualistic, purely competitive and predator-prey. It is necessary to develop an application methodology to mitigate the raw data which may be a compound signal which includes competition, seasonal and trend signals.