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arXiv:1601.05660 (physics)
[Submitted on 21 Jan 2016 (v1), last revised 2 Aug 2017 (this version, v2)]

Title:The role of consumer networks in firms' multi-characteristics competition and market-share inequality

Authors:Antonios Garas, Athanasios Lapatinas
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Abstract:We develop a location analysis spatial model of firms' competition in multi-characteristics space, where consumers' opinions about the firms' products are distributed on multilayered networks. Firms do not compete on price but only on location upon the products' 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 firms' location choice we characterize multi-dimensional product differentiation competition as adaptive learning by firms' managers and we argue that such a complex systems approach advances the analysis in alternative ways, beyond game-theoretic calculations.
Comments: 33 pages, 5 figures
Subjects: Physics and Society (physics.soc-ph); General Economics (econ.GN)
Cite as: arXiv:1601.05660 [physics.soc-ph]
  (or arXiv:1601.05660v2 [physics.soc-ph] for this version)
  https://doi.org/10.48550/arXiv.1601.05660

Submission history

From: Antonios Garas [view email]
[v1] Thu, 21 Jan 2016 14:43:11 UTC (933 KB)
[v2] Wed, 2 Aug 2017 12:17:05 UTC (1,288 KB)
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