Firm competition in a probabilistic framework of consumer choice

DOI10.1016/J.PHYSA.2013.12.026MaRDI QIDQ1782648zbMATH OpenOpenAlexFDO

Authors Hao Liao, Rui Xiao, Matúš Medo, Yi-Cheng Zhang, Duan-bing Chen

Publication date 20 September 2018

Published in Physica A (Search for Journal in Brave)

Full work available at URL https://arxiv.org/abs/1312.3826

zbMATH Keywords

consumer choicegame theoryinformation asymmetrymarket competition

Mathematics Subject Classification ID

Microeconomic theory (price theory and economic markets) (91B24) Consumer behavior, demand theory (91B42)

Abstract: We develop a probabilistic consumer choice framework based on information asymmetry between consumers and firms. This framework makes it possible to study market competition of several firms by both quality and price of their products. We find Nash market equilibria and other optimal strategies in various situations ranging from competition of two identical firms to firms of different sizes and firms which improve their efficiency.

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Cites work

• Bargains and Ripoffs: A Model of Monopolistically Competitive Price Dispersion
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• Happier world with more information
• scientific article; zbMATH DE number 2118872 (Why is no real title available?)
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Cited in

(10)

• Breadth, depth, and competition
• Slot allocation: a model of competition between firms when consumers are procedurally rational
• Competition and consumer choice in option demand markets
• Analytic uncertainty and sensitivity analysis of models with input correlations
• The stable marriage problem: an interdisciplinary review from the physicist's perspective
• Consideration sets and competitive marketing
• Consistent and Inconsistent Rules in Competitive Facility Choice
• Market failure in a new model of platform design with partially informed consumers
• Kinetic models of immediate exchange
• Emergence of product differentiation from consumer heterogeneity and asymmetric information

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