Issue
EPL
Volume 79, Number 4, August 2007
Article Number 48003
Number of page(s) 6
Section Interdisciplinary Physics and Related Areas of Science and Technology
DOI http://dx.doi.org/10.1209/0295-5075/79/48003
Published online 25 July 2007
EPL, 79 (2007) 48003
DOI: 10.1209/0295-5075/79/48003

Strategy bifurcation and spatial inhomogeneity in a simple model of competing sellers

L. Mitchell and G. J. Ackland

SUPA, School of Physics, The University of Edinburgh - Mayfield Road, Edinburgh EH9 3JZ, UK

lawrence.mitchell@ed.ac.uk
g.j.ackland@ed.ac.uk

received 5 April 2007; accepted in final form 3 July 2007; published August 2007
published online 25 July 2007

Abstract
We present a simple one-parameter model for spatially localised evolving agents competing for spatially localised resources. The model considers selling agents able to evolve their pricing strategy in competition for a fixed market. Despite its simplicity, the model displays extraordinarily rich behaviour. In addition to "cheap" sellers pricing to cover their costs, "expensive" sellers spontaneously appear to exploit short-term favourable situations. These expensive sellers "speciate" into discrete price bands. As well as variety in pricing strategy, the "cheap" sellers evolve a strongly correlated spatial structure, which in turn creates niches for their expensive competitors. Thus an entire ecosystem of coexisting, discrete, symmetry-breaking strategies arises.

PACS
89.65.Gh - Economics; econophysics, financial markets, business and management.
89.75.-k - Complex systems.
89.75.Fb - Structures and organization in complex systems.

© Europhysics Letters Association 2007