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Dynamics of brand competition: Effects of unobserved social networks

Sengupta, A. and Greetham, D. V. (2010) Dynamics of brand competition: Effects of unobserved social networks. Journal of Economic Dynamics and Control, 34 (12). pp. 2391-2406. ISSN 0165-1889

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To link to this article DOI: 10.1016/j.jedc.2010.06.009

Abstract/Summary

Brand competition is modelled using an agent based approach in order to examine the long run dynamics of market structure and brand characteristics. A repeated game is designed where myopic firms choose strategies based on beliefs about their rivals and consumers. Consumers are heterogeneous and can observe neighbour behaviour through social networks. Although firms do not observe them, the social networks have a significant impact on the emerging market structure. Presence of networks tends to polarize market share and leads to higher volatility in brands. Yet convergence in brand characteristics usually happens whenever the market reaches a steady state. Scale-free networks accentuate the polarization and volatility more than small world or random networks. Unilateral innovations are less frequent under social networks.

Item Type:Article
Refereed:Yes
Divisions:Faculty of Science > School of Mathematical and Physical Sciences > Department of Mathematics and Statistics
Faculty of Science > School of Mathematical and Physical Sciences > Department of Mathematics and Statistics > Centre for the Mathematics of Human Behaviour (CMOHB)
ID Code:17189
Uncontrolled Keywords:Dynamic oligopoly; Evolutionary game; Social network
Publisher:Elsevier

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