The Interest of Having Loyal Buyers in a Perishable Market
AbstractThe aim of this paper is to show the particular role of buyer loyalty in a perishable goods market. For this we build an agent-based model, inspired by a wholesale market on which we had performed some qualitative field study. In this model we define a very simple negotiation procedure for wholesalers and retailers, who are divided in two populations: loyal retailers who always visit the same seller first and opportunistic retailers who look for the best prices. In this setting, the presence of opportunistic retailers increases the quantity of waste and reduces global earnings for all agents. We then endogenize the attitude of retailers with a reinforcement learning mechanism and show that the number of loyal retailers reaches 80–100% of the population, depending on the difference of prices between expensive and cheap goods, which is the interval in which the production of waste is minimal. Copyright Springer Science+Business Media New York 2013
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Bibliographic InfoArticle provided by Society for Computational Economics in its journal Computational Economics.
Volume (Year): 41 (2013)
Issue (Month): 2 (February)
Loyalty; Learning; Search; Market for perishable goods; C88; D49; D83; Z13;
Find related papers by JEL classification:
- C88 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Other Computer Software
- D49 - Microeconomics - - Market Structure and Pricing - - - Other
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
- Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Social and Economic Stratification
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