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Decision making within a product network

Author

Listed:
  • Yusufcan Masatlioglu

    (University of Maryland)

  • Elchin Suleymanov

    (Purdue University)

Abstract

A product network comprises a vast number of goods which are linked to one another. This paper investigates decision making in this new environment by using revealed preference techniques. A decision maker will search within the network to uncover available goods. Due to the constraint imposed by the network structure and the starting point, the decision maker might not discover all available goods. We illustrate how one can deduce both the decision maker’s preference and her product network from observed behavior. We also consider an extension of the model where the decision maker might terminate the search before exhausting all the options (limited search).

Suggested Citation

  • Yusufcan Masatlioglu & Elchin Suleymanov, 2021. "Decision making within a product network," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 71(1), pages 185-209, February.
    • Handle: RePEc:spr:joecth:v:71:y:2021:i:1:d:10.1007_s00199-019-01238-z
    DOI: 10.1007/s00199-019-01238-z
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    References listed on IDEAS

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    Cited by:

    1. Alvaro Sandroni & Leo Katz, 2024. "The leveling axiom," Theory and Decision, Springer, vol. 96(1), pages 135-152, February.
    2. Kovach, Matthew & Suleymanov, Elchin, 2023. "Reference dependence and random attention," Journal of Economic Behavior & Organization, Elsevier, vol. 215(C), pages 421-441.
    3. Kremena Valkanova, 2024. "Markov Stochastic Choice," Papers 2410.22001, arXiv.org.
    4. Teruyoshi Kobayashi & Tomokatsu Onaga, 2023. "Dynamics of diffusion on monoplex and multiplex networks: a message-passing approach," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 76(1), pages 251-287, July.
    5. Chadd, Ian, 2023. "Random network consideration: Theory and experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 211(C), pages 251-269.

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    More about this item

    Keywords

    Product network; Search; Consideration set; Reference-dependent choice; Revealed preference;
    All these keywords.

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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