Agent-based modeling simulation under local network externality

Arnut Paothong () and G. Ladde ()

Journal of Economic Interaction and Coordination, 2014, vol. 9, issue 1, 26 pages

Abstract: In general, consumer utility of network goods is affected by the entire network size. The socio-cultural-economic affinities of consumers influence the network externality processes. In this work, we treat a consumer decision as a consumer decision dynamic process. We then formulate a dynamic structural representation of a consumer network structure, structure of utility function and decision rule under the influence of local network externality concept. This formulation generates a mathematical model for a consumer decision dynamic process. The byproduct of the dynamic model leads to an agent-based simulation model. The simulation model is used to investigate different types of consumer decision dynamic market equilibriums. Moreover, prototype illustrations are given to exhibit the association between network attributes and its market equilibriums. Copyright Springer-Verlag Berlin Heidelberg 2014

Keywords: Agent-based simulation model; Duopoly market; Hotelling location model; Local network externality; Mathematical model of decision dynamic process; Network structure; Structure of utility function; C15; C63; D11; D43; L13; L15 (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:spr:jeicoo:v:9:y:2014:i:1:p:1-26

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DOI: 10.1007/s11403-013-0110-4

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