The role of consumer networks in firmsÂ’ multi-characteristics competition and market share inequality

Antonios Garas and Athanasios Lapatinas

Structural Change and Economic Dynamics, 2017, vol. 43, issue C, 76-86

Abstract: We develop a location analysis spatial model of firmsÂ’ competition in multi-characteristics space, where consumersÂ’ opinions about the firmsÂ’ products are distributed on multilayered networks. Firms do not compete on price but only on location upon the productsÂ’ multi-characteristics space, and they aim to attract the maximum number of consumers. Boundedly rational consumers have distinct ideal points/tastes over the possible available firm locations but, crucially, they are affected by the opinions of their neighbors. Proposing a dynamic agent-based analysis on firmsÂ’ location choice we characterize multi-dimensional product differentiation competition as adaptive learning by firmsÂ’ managers and we argue that such a complex systems approach advances the analysis in alternative ways, beyond game-theoretic calculations.

Keywords: Agent-based; model; C63; C65; D72; Decision; heuristics; L14; Location; choice; Multi-characteristics; space; Networks; Political; competition; R39; consumer; behavior (search for similar items in EconPapers)
Date: 2017
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0954349X17302412
Full text for ScienceDirect subscribers only

Related works:
Working Paper: The role of consumer networks in firms' multi-characteristics competition and market-share inequality (2017)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:streco:v:43:y:2017:i:c:p:76-86

Access Statistics for this article

Structural Change and Economic Dynamics is currently edited by F. Duchin, H. Hagemann, M. Landesmann, R. Scazzieri, A. Steenge and B. Verspagen

More articles in Structural Change and Economic Dynamics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().