At using game theory. It should be noted that

At present, commercial aircraft are experiencing strong
demand growth that is driving the aviation industry better. According to Fall
(205) it is derived that the aviation sectors are in fact experiencing the
Golden Age for the second time. Airbus and Boeing are still in a state of
tension if the bilateral monopoly of the place where they were previously
operating is still at risk, although they still welcome the global increase in
orders. Thus, the emerging industry aircraft industry intends to link itself
with lucrative markets and further add new entrants to the narrow body or
single-lane segment and regional aircraft.

It is worth mentioning that the aircraft company, for
example, Mitsubishi Japan Aircraft Company and China Commercial Aircraft
Company use their domestic markets to develop technical skills and capabilities
as required. With this, they are competitive enough and still stand strong in
the market. China’s commercial aircraft company is referred to as the global
civil aviation market, which was a classic dual monopoly for a long time. The
European company, such as the US giant Boeing and Airbus, dominated the sector
with minimal competition from Embraer of Brazil and Bombardier of Canada, which
is the regional aircraft market. However, this calls for change because of Comic’s
intentions for a commercial airliner. However, this article will explore more
about the behavior of Airbus and Boeing using game theory.

We Will Write a Custom Essay Specifically
For You For Only $13.90/page!

order now

It should be noted that most States have a variety of
diverse laws that protect local industries from any damage caused by imports in
the country. Some of these laws constitute subsidies and dumping. As a result,
some laws are used to protect fair trade, which has had an intense impact on
domestic firms, especially in the United States. On the other hand, the US
antitrust law is used to promote competition for the consumer interest in the
market. The anti-dumping rule is not favorable because the law does not
adequately solve the problem of the use of market power. As such, more
distortions occur in the market than they solve. It has been noted that
anti-dumping and antitrust laws have affected global achievement in various
aspects (Wotton and Zanardi 35).

In the case of Boeing and Airbus Airways, they are drawn to
be their only competitors for the aircraft industry in all sectors. Although
both companies have extensive resources, they are struggling for civil aircraft
to be manufactured, but competitive quotas are too high. Boeing and Airbus
Airways are alleged to be the main carrier of narrow commercial aircraft
(Harner 73). Companies were ready to set strategic targets that would help them
encircle the market sector. In fact, companies have acquired multiple projects
and gained competitive advantage. However, given some laws such as anti-trust
some global business faces a lot of challenges in trying to be competitive in
the market. The reason is that laws regulate acquisitions, mergers and business
activities to promote fair competition and benefit from the consumer.
Fundamentally, bilateral monopoly is facing a lot of challenge, which has a
significant impact on market share due to the entry of new Chinese companies
into the aircraft industry.

As a result, dominant producers in narrowly competing
aircraft face subversive competition due to the entry of additional
competitors. It is certain that the new participant should build his market
share as soon as possible if his aircraft is archived. However, it will take
longer for new competitors to produce high quality aircraft than a monopolistic
company. The Government also charges fees and controls the level of completion
between companies. For example, for the three companies, new entrants into a
large sector of civil aircraft will become state-controlled and state-owned
enterprises. This makes commercial consideration less important during the
business aviation development phase.

In addition, China’s deep investment in aircraft
manufacturing is not only on aircraft production but also on the organization
of the nation’s industrial resources. Primarily, in the initial phase, (Bonn
& McCollock 53), major financial support will be directed to enterprises
across the country and the provincial aviation industries from the coastal
provinces to the interior and from north to south. Indeed, China expects great
hopes in its intention to build a national network of production base and
expand its manufacturing capacity so that it can promote long-term development
in the future

According to research, it has been pointed out that
competitions are a major challenge for most companies. Therefore, in order for
companies to be competitive, they must develop new strategies and techniques so
that they can improve their market share and market position. In order for
companies to evaluate and complete the achievement, they must use unique
methods, for example, to define the rules of engagement for competitors. This
requires knowing the intent of the competition involved, extracting the
competition and testing its response. The company can always fool so that the
competitor’s step can be examined and responded. Within the aviation industry,
signals and rules are usually used to manage competitive dynamics.

It has been pointed out that since Boeing and Airbus have a
dual monopoly market in the aviation industry especially in the broad-body
aircraft, the market has a lot of input complications and product development
in the market. As a fact, this has led to the theory of the game being a
dominant factor due to the emerging competitive field of its market share. In
addition, Boeing and Airbus have produced different alternatives in different
categories such as long, medium and long-range aircraft because they do not
want to compete for price alone because it leads to lower profits. In this
account, the presence of multi-product companies complicates the production
strategies of game theory in the market.

Game theory

Game theory can be defined as a study of human cooperation
and conflict in a competitive landscape. The theory of the game is
significantly necessary in different perspectives such as first, it enables
practitioners and researchers to review the basic buildings using the audit
trail. In so doing, management considers whether they are relevant in practice
and explicitly formulating the underlying assumption. Moreover, the game theory
provides a favorable methodology to accurately deduce a new look and provide
analysis which in some cases may be self-evident. Finally, by enforcing a
common language it helps to achieve discipline that allows managers and
researchers to refine previous models and compare results. As such, game theory
helps to understand and study the interaction between humans, as well as the
organization for example in the Boeing and Airbus industry.

Game theory, Boeing and Airbus

Practically, game theory studies competition in the dynamics
of aircraft manufacturers since it explores multiple actors who in their own
interest make rational decisions. In the assumption, players in the market
claim that most players make a rational decision. Through this framework, it
becomes easier to discover the best response for each individual player in the
market based on the expected strategy. Significantly, this analysis helps to
estimate the order of return order to determine the current changes in the
market structure, which may change the balance of the match results by
comparing the consistent frame. However, given the nature of ownership of the
economic data program of the aircraft, it is regrettable that this analysis is
handicapped. The general data source available, is used as agents while showing
the extent of the effect of assumptions on the results using sensitivity
analysis. This assumption is more reasonable than others.

In essence, the parameter of importance for the performance
of the aircraft in this report is drawn to be the fuel density which is
referred to as the amount of energy consumed per unit of output. Approximately,
per mile seat, the fuel is used and burned appropriately. According to
research, the reduction in fuel intensity is indicated by the use of improved
efficiency. Apparently, there is a complete production line that is available
at Airbus and Boeing that are used to stretch 100+ seat market segments. The
condition of the product in one sector of the market restricts the decision
taken in another sector of the market. Historically, manufacturers have been
prevented from doing at any one time more than one major aircraft design
program because of limited capital and engineering resources. Despite this
analysis, complexity is neglected because it is assumed that manufacturers make
decisions regarding a single corridor market without decisions imposing any
restrictions on the dual-corridor market theme.

According to the research, Pincard (675) stated that the
large-bodied commercial aircraft company had developed a monopolistic model of
experimental dynamics, which was used to assess the cost of production,
performance, policy and price of the aircraft. It is recognized that the
properties of aircraft that are known to consumers but are not observable are
represented with Markov’s stochastic process. With this, empirically estimated
that the cost of production is not affected. Use the Pinkard (675) engine
number and quality parameter as an alternative to fuel efficiency. Apart from
that, his approach focuses on the supposed efficiency of fuel rather than
experimental econometric analysis. Fuel efficiency ranges from 21 out of the
113 external conditions used to estimate the preference for the expected demand
between the aircraft production line provided by the manufacturing competitors.

According to research, the demand for large aircraft has
increased significantly due to overcrowding in the airbus. For example, Boeing
and Airbus began to develop their products as demand for companies that
excluded the market was that there was only one competitor. On the demand side,
it was t