Adjustment and social choice

Gérard Weisbuch and Dietrich Stauffer

Physica A: Statistical Mechanics and its Applications, 2003, vol. 323, issue C, 651-662

Abstract: We discuss the influence of information contagion on the dynamics of choices in social networks of heterogeneous buyers. Starting from an inhomogeneous cellular automata model of buyers dynamics, we show that when agents try to adjust their reservation price, the tatonnement process does not converge to equilibrium at some intermediate market share and that large amplitude fluctuations are actually observed. When the tatonnement dynamics is slow with respect to the contagion dynamics, large periodic oscillations reminiscent of business cycles appear.

Date: 2003
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Citations: View citations in EconPapers (13)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:phsmap:v:323:y:2003:i:c:p:651-662

DOI: 10.1016/S0378-4371(03)00010-4

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