Dynamics of brand competition: Effects of unobserved social networks

Brand competition is modelled using an agent based approach in order to examine the long run dynamics of market structure and brand characteristics. A repeated game is designed where myopic firms choose strategies based on beliefs about their rivals and consumers. Consumers are heterogeneous and can...

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Bibliographic Details
Published in:Journal of economic dynamics & control 2010-12, Vol.34 (12), p.2391-2406
Main Authors: Sengupta, Abhijit, Greetham, Danica Vukadinović
Format: Article
Language:English
Subjects:
Brand equity
Brands
Competition
Dynamic oligopoly
Dynamic oligopoly Evolutionary game Social network
Evolutionary economics
Evolutionary game
Game theory
Market structure
Marketing research
Network analysis
Network industries
Oligopoly
Quantitative Finance
Social network
Social networks
Studies
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Summary:Brand competition is modelled using an agent based approach in order to examine the long run dynamics of market structure and brand characteristics. A repeated game is designed where myopic firms choose strategies based on beliefs about their rivals and consumers. Consumers are heterogeneous and can observe neighbour behaviour through social networks. Although firms do not observe them, the social networks have a significant impact on the emerging market structure. Presence of networks tends to polarize market share and leads to higher volatility in brands. Yet convergence in brand characteristics usually happens whenever the market reaches a steady state. Scale-free networks accentuate the polarization and volatility more than small world or random networks. Unilateral innovations are less frequent under social networks.
ISSN:0165-1889
1879-1743
DOI:10.1016/j.jedc.2010.06.009