Simulation of consumer market

Pao Yue-kong Library Electronic Theses Database

Simulation of consumer market


Author: Leung, Shuk-kwan Annie
Title: Simulation of consumer market
Degree: M.Sc.
Year: 1997
Subject: Consumer behavior -- Computer simulation
Hong Kong Polytechnic University -- Dissertations
Department: Multi-disciplinary Studies
Pages: iii, 41 leaves : ill. ; 30 cm
Language: English
InnoPac Record:
Abstract: A novel model of free market is simulated with firms providing a given durable product, for example TV set, at different pricing strategies. As this is a rather long term purchase, consumers usually consider very carefully. The purchase decision involves several criteria: consumer's target price and quality range, recommendation by others and subjective evaluation. Some realistic features of the market are reproduced qualitatively in the model. Specifically, the approximate linear relationship between average satisfaction level and market share is found to emerge out of the system. At the same time, the almost normal distribution of market share with respect to price coexists in the system. The underlying principle leading to satisfaction with the product selected are discussed. More importantly, the effect of positive feedback (when a consumer is satisfied with the purchase) on market share distribution are demonstrated. The outcomes of the simulation suggest that the proposed formulation for satisfaction level and its effect on purchase decision may be an adequate description of the reality. The simulated system has a high degree of freedom and the interactions between the microscopic elements are complex. It is proven to be suitable and more straight forward to address the question with the approach commonly used in the science of complexity.

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