The Interest of Having Loyal Buyers in a Perishable Market

Authored by Unknown

Date Published: 2013-02

DOI: 10.1007/s10614-012-9334-y

Sponsors: French National Center for Scientific Research (CNRS) British Council

Platforms: No platforms listed

Model Documentation: Other Narrative Mathematical description

Model Code URLs: Model code not found

Abstract

The aim of this paper is to show the particular role of buyer loyalty in a perishable goods market. For this we build an agent-based model, inspired by a wholesale market on which we had performed some qualitative field study. In this model we define a very simple negotiation procedure for wholesalers and retailers, who are divided in two populations: loyal retailers who always visit the same seller first and opportunistic retailers who look for the best prices. In this setting, the presence of opportunistic retailers increases the quantity of waste and reduces global earnings for all agents. We then endogenize the attitude of retailers with a reinforcement learning mechanism and show that the number of loyal retailers reaches 80-100% of the population, depending on the difference of prices between expensive and cheap goods, which is the interval in which the production of waste is minimal.

Tags

Learning Search Loyalty Market for perishable goods