Volume 79, Number 4, August 2007
|Number of page(s)||6|
|Section||Interdisciplinary Physics and Related Areas of Science and Technology|
|Published online||25 July 2007|
Strategy bifurcation and spatial inhomogeneity in a simple model of competing sellers
SUPA, School of Physics, The University of Edinburgh - Mayfield Road, Edinburgh EH9 3JZ, UK
Accepted: 3 July 2007
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
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