Adjustment and social choice

Abstract

We discuss the influence of information contagion on the dynamics of choices in social networks of heterogeneous buyers. Starting from an inhomogeneous cellular automata model of buyers dynamics, we show that when agents try to adjust their reservation price, the tatonement process does not converge to equilibrium at some intermediate market share and that large amplitude fluctuations are actually observed. When the tatonnement dynamics is slow with respect to the contagion dynamics, large periodic oscillations reminiscent of business cycles appear.

arXiv comment13 pages, 6 figures

References in corpus (3)

• Statistical mechanics of complex networks
• Social Percolation
• Marketing Percolation

Cited by in corpus (8)

• Agent-based Models of Financial Markets
• Short-time behaviour of demand and price viewed through an exactly solvable model for heterogeneous interacting market agents
• Interdependent binary choices under social influence: phase diagram for homogeneous unbiased populations
• A Market of Inhomogeneous Threshold Cellular Automata
• Entanglement between Demand and Supply in Markets with Bandwagon Goods
• Memory-induced mechanism for self-sustaining activity in networks
• Monopoly Market with Externality: an Analysis with Statistical Physics and Agent Based Computational Economics
• Discrete Choices under Social Influence: Generic Properties