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Fuzzy-Logical Approach To Constructing An Integral Indicator In A Level Estimation Model Significant Market Advantage

Author

Listed:
  • Valentin Myachin

    (Ukrainian State University of Chemical Technology, Ukraine)

  • Olena Yudina

    (Dnipro Humanitarian University, Ukraine)

Abstract

The purpose of this research is to construct fuzzy expert system to estimate an integral degree of market concentration by fuzzy-logical approach. The methodological basis of the study consists of scientific works of domestic and foreign scientists and leading specialists, statistical and analytical materials of state authorities. Fuzzy Inference is introduced for the integrated indicator construction. Two indicators are chosen as input variables. The first indicator, CR, is a level of concentration ratio. The second indicator, HHI, is the Herfindahl-Hirschman index. Output variable, MC indicator, means a degree of market concentration. Both input and output variables are transformed to fuzziness through the construction of membership function. The function type and parameters are substantiated and "bell"-shaped membership function to describe uncertainty of the values falling under normal distribution is chosen. The quantity of fuzzy sets at every input is considered z=3 and the quantity of input variables is considered ω=2. To achieve completeness of the model, the quantity of logic rules is considered r=3²=9. To calculate a degree of market concentration, Mamdani fuzzy conclusion is applied. Defuzzification is engaged to calculate value of the output variable which is MC indicator to mean a degree of market concentration and therefore readiness to implement the innovation strategy for enterprises active in innovation. To estimate a degree of market concentration, the fuzzy expert system given allows for engagement of different indicators due to fuzzy logic methodology which considers fuzziness of the input and output variables. The construction of an integral indicator for assessing the state of economic competition in order to establish the feasibility of identifying operators and providers with a significant market advantage will improve the assessment of the state of economic competition in the market in the telecommunications services market in Ukraine.

Suggested Citation

  • Valentin Myachin & Olena Yudina, 2021. "Fuzzy-Logical Approach To Constructing An Integral Indicator In A Level Estimation Model Significant Market Advantage," Baltic Journal of Economic Studies, Publishing house "Baltija Publishing", vol. 7(2).
    • Handle: RePEc:bal:journl:2256-0742:2021:7:2:16
    DOI: 10.30525/2256-0742/2021-7-2-139-145
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    More about this item

    Keywords

    monopolization of the market; market concentration coefficient; the Herfindahl-Hirschman index; fuzzy expert system; fuzzy logic; membership function; defuzzification;
    All these keywords.

    JEL classification:

    • B21 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Microeconomics
    • B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology
    • C65 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Miscellaneous Mathematical Tools
    • D41 - Microeconomics - - Market Structure, Pricing, and Design - - - Perfect Competition
    • D42 - Microeconomics - - Market Structure, Pricing, and Design - - - Monopoly
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection

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