Consumers' Search Cost and Emerging Structure of Web Sites Coalitions : a multi-agent based simulation of an electronic market

We have developed an agent-based computational model, extension of an analytical model that studies the structure of coalitions of B-to-C web sites, when Internet buyers incur search costs for finding the good that matches their preferences, and coalitions of sites reduce this cost through specialized search engines. This multi-agent model consists of heterogeneous, bounded rational agents: sites and web users, which have states and rules of behavior. Our goal is to run simulations by instantiating two agent populations (a population of sites/sellers and a population of web users/consumers), let the agents interact through the consumer search process and the coalition formation process, and monitor the evolution of the simulations in order to study the emerging dynamics, in particular the emerging coalition structure. The agent-based model extends the analytical results for less restricting assumptions. Moreover, beyond the coalition formation process, the analytical model is enriched by additional behaviors for the sites (entry and death), which give insights on the dynamics of competition when building coalition matters for increasing demand at the expense of non or less coalesced sites.