A computational consumer-driven market model: statistical properties and the underlying industry dynamics

Authored by Carlos M Fernandez-Marquez, Francisco Fatas-Villafranca, Francisco J Vazquez

Date Published: 2017

DOI: 10.1007/s10588-016-9230-4

Sponsors: No sponsors listed

Platforms: Repast

Model Documentation: Other Narrative Pseudocode Mathematical description

Model Code URLs: Model code not found

Abstract

We present an agent-based market model in which social emulation by consumers and the adaptation of producers to demand play a significant role. Our theoretical approach considers boundedly-rational agents, heterogeneity of agents and product characteristics, and the co-evolution of consumers' desires and firms' adaptation efforts. The model reproduces, and allows us to interpret, statistical regularities which have been observed in the evolution of industrial sectors, and that seem to be also significant in the case of discretionary consumption activities. Thus, we suggest new determinants and explanations (from the consumer-side) for these stylized facts, and we obtain new theoretical patterns which may be of help to better understand the dynamics of discretionary goods markets. This model and results may contribute to guide future research on the field of consumer market.

Tags

Agent-based model Innovation Economics preferences growth Demand Emulation Firms Industrial stylized facts Consumer theory Demand-driven model Fashion