Economy – Quantitative Finance – General Finance
Scientific paper
2008-09-09
Economy
Quantitative Finance
General Finance
Scientific paper
10.1088/1742-5468/2008/11/P11018
In this paper we introduce two models of opinion dynamics in oligopoly markets and apply them to a situation, where a new entrant challenges two incumbents of the same size. The models differ in the way the two forces influencing consumer choice -- (local) social interactions and (global) advertising -- interact. We study the general behavior of the models using the Mean Field Approach and Monte Carlo simulations and calibrate the models to data from the Polish telecommunications market. For one of the models criticality is observed -- below a certain critical level of advertising the market approaches a lock-in situation, where one market leader dominates the market and all other brands disappear. Interestingly, for both models the best fits to real data are obtained for conformity level $p \in (0.3,0.4)$. This agrees very well with the conformity level found by Solomon Asch in his famous social experiment.
Sznajd--Weron Katarzyna
Weron Rafał
Włoszczowska Maja
No associations
LandOfFree
Outflow Dynamics in Modeling Oligopoly Markets: The Case of the Mobile Telecommunications Market in Poland does not yet have a rating. At this time, there are no reviews or comments for this scientific paper.
If you have personal experience with Outflow Dynamics in Modeling Oligopoly Markets: The Case of the Mobile Telecommunications Market in Poland, we encourage you to share that experience with our LandOfFree.com community. Your opinion is very important and Outflow Dynamics in Modeling Oligopoly Markets: The Case of the Mobile Telecommunications Market in Poland will most certainly appreciate the feedback.
Profile ID: LFWR-SCP-O-210626