Agent-based simulation of lock-in dynamics in a duopoly

Michael Garlick, Maria Chli

Research output: Contribution to conferencePaper

Abstract

Lock-in is observed in real world markets of experience goods; experience goods are goods whose characteristics are difficult to determine in advance, but ascertained upon consumption. We create an agent-based simulation of consumers choosing between two experience goods available in a virtual market. We model consumers in a grid representing the spatial network of the consumers. Utilising simple assumptions, including identical distributions of product experience and consumers having a degree of follower tendency, we explore the dynamics of the model through simulations. We conduct simulations to create a lock-in before testing several hypotheses upon how to break an existing lock-in; these include the effect of advertising and free give-away. Our experiments show that the key to successfully breaking a lock-in required the creation of regions in a consumer population. Regions arise due to the degree of local conformity between agents within the regions, which spread throughout the population when a mildly superior competitor was available. These regions may be likened to a niche in a market, which gains in popularity to transition into the mainstream.
Original languageEnglish
Pages1545-1546
Number of pages8
Publication statusPublished - 2010
Event9th International Joint Conference on Autonomous Agents and Multiagent Systems - Toronto, ON, Canada
Duration: 10 May 201014 May 2010

Conference

Conference9th International Joint Conference on Autonomous Agents and Multiagent Systems
Abbreviated titleAAMAS 2010
CountryCanada
CityToronto, ON
Period10/05/1014/05/10

Fingerprint

Duopoly
Agent-based simulation
Lock-in
Simulation
Virtual market
Niche
Conformity
Grid
Competitors
Experiment
Follower
World market
Hypothesis testing

Bibliographical note

© IFAAMAS

Keywords

  • simulation and modelling
  • model development
  • modelling methodologies
  • economics
  • sociology
  • experimentation
  • human factors
  • agent-based simulation
  • consumer behaviour
  • lock-in

Cite this

Garlick, M., & Chli, M. (2010). Agent-based simulation of lock-in dynamics in a duopoly. 1545-1546 . Paper presented at 9th International Joint Conference on Autonomous Agents and Multiagent Systems, Toronto, ON, Canada.
Garlick, Michael ; Chli, Maria. / Agent-based simulation of lock-in dynamics in a duopoly. Paper presented at 9th International Joint Conference on Autonomous Agents and Multiagent Systems, Toronto, ON, Canada.8 p.
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Garlick, M & Chli, M 2010, 'Agent-based simulation of lock-in dynamics in a duopoly', Paper presented at 9th International Joint Conference on Autonomous Agents and Multiagent Systems, Toronto, ON, Canada, 10/05/10 - 14/05/10 pp. 1545-1546 .

Agent-based simulation of lock-in dynamics in a duopoly. / Garlick, Michael; Chli, Maria.

2010. 1545-1546 Paper presented at 9th International Joint Conference on Autonomous Agents and Multiagent Systems, Toronto, ON, Canada.

Research output: Contribution to conferencePaper

TY - CONF

T1 - Agent-based simulation of lock-in dynamics in a duopoly

AU - Garlick, Michael

AU - Chli, Maria

N1 - © IFAAMAS

PY - 2010

Y1 - 2010

N2 - Lock-in is observed in real world markets of experience goods; experience goods are goods whose characteristics are difficult to determine in advance, but ascertained upon consumption. We create an agent-based simulation of consumers choosing between two experience goods available in a virtual market. We model consumers in a grid representing the spatial network of the consumers. Utilising simple assumptions, including identical distributions of product experience and consumers having a degree of follower tendency, we explore the dynamics of the model through simulations. We conduct simulations to create a lock-in before testing several hypotheses upon how to break an existing lock-in; these include the effect of advertising and free give-away. Our experiments show that the key to successfully breaking a lock-in required the creation of regions in a consumer population. Regions arise due to the degree of local conformity between agents within the regions, which spread throughout the population when a mildly superior competitor was available. These regions may be likened to a niche in a market, which gains in popularity to transition into the mainstream.

AB - Lock-in is observed in real world markets of experience goods; experience goods are goods whose characteristics are difficult to determine in advance, but ascertained upon consumption. We create an agent-based simulation of consumers choosing between two experience goods available in a virtual market. We model consumers in a grid representing the spatial network of the consumers. Utilising simple assumptions, including identical distributions of product experience and consumers having a degree of follower tendency, we explore the dynamics of the model through simulations. We conduct simulations to create a lock-in before testing several hypotheses upon how to break an existing lock-in; these include the effect of advertising and free give-away. Our experiments show that the key to successfully breaking a lock-in required the creation of regions in a consumer population. Regions arise due to the degree of local conformity between agents within the regions, which spread throughout the population when a mildly superior competitor was available. These regions may be likened to a niche in a market, which gains in popularity to transition into the mainstream.

KW - simulation and modelling

KW - model development

KW - modelling methodologies

KW - economics

KW - sociology

KW - experimentation

KW - human factors

KW - agent-based simulation

KW - consumer behaviour

KW - lock-in

M3 - Paper

SP - 1545

EP - 1546

ER -

Garlick M, Chli M. Agent-based simulation of lock-in dynamics in a duopoly. 2010. Paper presented at 9th International Joint Conference on Autonomous Agents and Multiagent Systems, Toronto, ON, Canada.