An agent-based model of product competition: network structure and coexistence under different information regimes
Giovanni Pegoretti,
Francesco Rentocchini and
Giuseppe Vittucci Marzetti
No 916, Openloc Working Papers from Public policies and local development
Abstract:
The paper analyzes how the structure of interaction networks affects the diffusion patterns and market shares of different products in case of local network externalities and imperfect information. The diffusion of the different products/technologies in the market is modelled as the result of two (only partly) interrelated dynamics: i) the interaction between idiosyncratic individual thresholds and local network externalities; ii) the diffusion of the information about the product (via broadcast diffusion and word-of-mouth). The average clustering coefficient affects the overall outcome and the actual possibility that one product corners the market. Moreover, in case of small-world networks, despite the high clustering coefficient which increases the probability of an outcome with coexistence, the increase in the speed of diffusion impinges on the actual realization of such an outcome in case of sequential entry of the different technologies and/or imperfect information.
Keywords: Agent-based model; innovation di usion; network e ects; social networks; small-world (search for similar items in EconPapers)
JEL-codes: D83 D85 M31 O33 (search for similar items in EconPapers)
Date: 2009
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Persistent link: https://EconPapers.repec.org/RePEc:trn:utwpol:0916
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