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A positive net profit strategy and a pure substrate transfer strategy are both necessary for an ensemble to succeed in the presence of a fixed cost

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  • Friedrich, Thomas

Abstract

Rational net profit maximization or caring transfers according purely to need are two competing ideas seemingly excluding each other. Within the model “transfer space” I show that both strategies are necessary for an ensemble to succeed in the presence of a fixed cost. The transfer space of an ensemble consists of two parties, a source and a sink. Both parties have linear cost functions and saturating benefit functions. Both functions are dependent on the substrate concentration. In the presence of a fixed cost the net profit of a single party is negative at low and high concentrations. An ensemble striving for superadditive net profit is unable to overcome the initial phase of negative net profit within sink as sink is inactive and a forced small test transfer results in subadditivity. This strategy is unable to start in the presence of a fixed cost. The substrate transfer strategy is able to overcome the initial phase of negative net profit and subadditivity with patient transfers and enters the phase of superadditivity. This strategy fails later when the superadditivity turns into subadditivity again. This strategy is unable to stop the transfer. Successful ensembles use both strategies in sequence. Ensembles of strangers and entangled ensembles transfer substrate when the success factor is sufficient. Entanglement reduces the necessity for a high success factor. A mistaken assumption of genetic entanglement within a not entangled ensemble harms performance. No ensemble can compete successfully with less quantity and less quality than the competitor.

Suggested Citation

  • Friedrich, Thomas, 2023. "A positive net profit strategy and a pure substrate transfer strategy are both necessary for an ensemble to succeed in the presence of a fixed cost," MPRA Paper 117108, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:117108
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    File URL: https://mpra.ub.uni-muenchen.de/117108/1/fixed%20cost%2C%20entanglement.pdf
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    References listed on IDEAS

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    1. Laurent Keller & Kenneth G. Ross, 1998. "Selfish genes: a green beard in the red fire ant," Nature, Nature, vol. 394(6693), pages 573-575, August.
    2. Friedrich, Thomas, 2021. "Deterministic chaos within the transfer space - An unstable fixed point as a narrow ford to complexity through chaos," MPRA Paper 110993, University Library of Munich, Germany.
    3. Friedrich, Thomas, 2014. "Entanglement by Genes or Shares; Hamilton´s rule of kin selection revisited," MPRA Paper 60267, University Library of Munich, Germany.
    4. Friedrich, Thomas, 2019. "Transfers by force and deception lead to stability in an evolutionary learning process when controlled by net profit but not by turnover," MPRA Paper 92724, University Library of Munich, Germany.
    5. Friedrich, Thomas, 2018. "Evolution towards higher net profit in a population of ensembles of ensembles leads to division of labour," MPRA Paper 85517, University Library of Munich, Germany.
    6. Friedrich, Thomas, 2016. "Aquila non captat muscas :Homo Economicus between exploration and exploitation," MPRA Paper 75601, University Library of Munich, Germany.
    7. Friedrich, Thomas, 2020. "Inflation and deflation of the transfer space," MPRA Paper 103402, University Library of Munich, Germany.
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    Cited by:

    1. Friedrich, Thomas, 2024. "The positive net profit space is a subspace of the transfer space," MPRA Paper 120138, University Library of Munich, Germany.

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    More about this item

    Keywords

    source; sink; ensemble; net profit; benefit factor; cost factor; superadditivity; subadditivity; transfer strategy; net profit strategy; entanglement; quality; quantity;
    All these keywords.

    JEL classification:

    • Z00 - Other Special Topics - - General - - - General

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