Agent-based modeling and simulation of the decision behaviors of e-retailers

Authored by Guoyin Jiang, Shan Liu, Wenping Liu, Yan Xu

Date Published: 2018

DOI: 10.1108/imds-07-2017-0321

Sponsors: Chinese National Natural Science Foundation

Platforms: NetLogo

Model Documentation: Other Narrative Flow charts Mathematical description

Model Code URLs: Model code not found

Abstract

Purpose Social media facilitates consumer exchanges on product opinions and provides comprehensive knowledge of online products. The interaction between consumers and e-retailers evolves into a collective set of dynamics within a complex system. Agent-based modeling is well suited to stimulate such complex systems. The purpose of this paper is to integrate agent-based model and technique for order performance by similarity to ideal solution (TOPSIS) to simulate decision behaviors of e-retailers in competitive online markets. Design/methodology/approach An agent-based network model using the TOPSIS driven by actual price data is developed. The authors ran an experimental model to simulate interactions between online consumers and e-retailers and to record simulation data. A nonparametric test is used to conduct data analysis and evaluate the sensibility of parameters. Findings Simulation results showed that different profits could be obtained for various brands under different social network structures. E-retailers could achieve more profits through cross-selling than single-selling; however, the highest profits can be achieved when some adopt cross-selling, whereas others use single-selling. From a game perspective, the equilibrium for price-adjustment frequency can be determined from the simulation data. Thus, price adjustment differences significantly affect e-retailer profit. Originality/value This study provides new insights into the evolutionary dynamics of online markets. This work also indicates how to build an integrated simulation model with an agent-based model and TOPSIS and how to use an integrated simulation model and interpret its results.

Tags

Agent-based modelling Evolution Market TOPSIS Supply chains Internet e-commerce Diffusion-model Consumer Price dispersion Computational approach Cross-selling Collective dynamics Online book industry Social commerce