Showing or telling? Local interaction and organization of behavior

Zakaria Babutsidze and Robert Cowan
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Robert Cowan: Maastricht University [Maastricht]

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Abstract: We present a choice model based on agent interaction. Interaction is modeled as face-to-face communication that takes place on a regular periodic lattice with decision-makers exchanging information only with immediate neighbors. We investigate the long-run (equilibrium) behavior of the resulting system and show that for a large range of initial conditions clustering in economic behavior emerges and persists indefinitely. Unlike many models in the literature, our model allows for the analysis of multi-option environments. Therefore, we add to existing results by deriving the equilibrium distribution of option popularity and thus, implicitly, of market shares. Additionally, the model sheds new light on the emergence of the novel behavior in societies.

Keywords: Interaction; Inertia; Clustering; Choice (search for similar items in EconPapers)
Date: 2014-10
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Citations: View citations in EconPapers (1)

Published in Journal of Economic Interaction and Coordination, 2014, 9 (2), pp.151-181. ⟨10.1007/s11403-013-0117-x⟩

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Journal Article: Showing or telling? Local interaction and organization of behavior (2014)
Working Paper: Showing or telling? Local interaction and organization of behavior (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:spmain:hal-03411765

DOI: 10.1007/s11403-013-0117-x

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