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Market model with heterogeneous buyers

Author

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  • Medo, Matúš
  • Zhang, Yi-Cheng

Abstract

In market modeling, one often treats buyers as a homogeneous group. In this paper we consider buyers with heterogeneous preferences and products available in many variants. Such a framework allows us to successfully model various market phenomena. In particular, we investigate how is the vendor’s behavior influenced by the amount of available information and by the presence of correlations in the system.

Suggested Citation

  • Medo, Matúš & Zhang, Yi-Cheng, 2008. "Market model with heterogeneous buyers," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 387(12), pages 2889-2908.
    • Handle: RePEc:eee:phsmap:v:387:y:2008:i:12:p:2889-2908
    DOI: 10.1016/j.physa.2008.01.008
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    References listed on IDEAS

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    1. Lage-Castellanos, Alejandro & Mulet, Roberto, 2006. "The marriage problem: From the bar of appointments to the agency," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 364(C), pages 389-402.
    2. Zhang, Yi-Cheng, 2001. "Happier world with more information," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 299(1), pages 104-120.
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    4. Joseph E. Stiglitz, 2002. "Information and the Change in the Paradigm in Economics," American Economic Review, American Economic Association, vol. 92(3), pages 460-501, June.
    5. Challet, Damien & Marsili, Matteo & Zhang, Yi-Cheng, 2013. "Minority Games: Interacting agents in financial markets," OUP Catalogue, Oxford University Press, number 9780199686698.
    6. Zhang, Yi-Cheng, 2005. "Supply and demand law under limited information," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 350(2), pages 500-532.
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    Citations

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    Cited by:

    1. Tilles, Paulo F.C. & Ferreira, Fernando F. & Francisco, Gerson & Pereira, Carlos de B. & Sarti, Flavia M., 2011. "A Markovian model market—Akerlof’s lemons and the asymmetry of information," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 390(13), pages 2562-2570.
    2. Liu, Ji & Deng, Guishi, 2009. "Link prediction in a user–object network based on time-weighted resource allocation," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 388(17), pages 3643-3650.
    3. Wen-Juan Xu & Chen-Yang Zhong & Fei Ren & Tian Qiu & Rong-Da Chen & Yun-Xin He & Li-Xin Zhong, 2020. "Evolutionary dynamics in financial markets with heterogeneities in strategies and risk tolerance," Papers 2010.08962, arXiv.org.
    4. Yuan, Guanghui & Han, Jingti & Zhou, Lei & Liang, Hejun & Zhang, Yicheng, 2019. "Supply and demand law under variable information," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 536(C).
    5. Devreese, J.P.A. & Lemmens, D. & Tempere, J., 2010. "Path integral approach to Asian options in the Black–Scholes model," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 389(4), pages 780-788.

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