Strategy bifurcation and spatial inhomogeneity in a simple model of competing sellers

L. Mitchell and G. J. Ackland

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Abstract: We present a simple one-parameter model for spatially localised evolving agents competing for spatially localised resources. The model considers selling agents able to evolve their pricing strategy in competition for a fixed market. Despite its simplicity, the model displays extraordinarily rich behavior. In addition to ``cheap'' sellers pricing to cover their costs, ``expensive'' sellers spontaneously appear to exploit short-term favorable situations. These expensive sellers ``speciate'' into discrete price bands. As well as variety in pricing strategy, the ``cheap'' sellers evolve a strongly correlated spatial structure, which in turn creates niches for their expensive competitors. Thus an entire ecosystem of coexisting, discrete, symmetry-breaking strategies arises.

Date: 2007-03, Revised 2007-04
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Published in Europhys. Lett., 79 (4) 48003 (2007)

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