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Strategy bifurcation and spatial inhomogeneity in a simple model of competing sellers

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  • L. Mitchell
  • G. J. Ackland

Abstract

We present a simple one-parameter model for spatially localised evolving agents competing for spatially localised resources. The model considers selling agents able to evolve their pricing strategy in competition for a fixed market. Despite its simplicity, the model displays extraordinarily rich behavior. In addition to ``cheap'' sellers pricing to cover their costs, ``expensive'' sellers spontaneously appear to exploit short-term favorable situations. These expensive sellers ``speciate'' into discrete price bands. As well as variety in pricing strategy, the ``cheap'' sellers evolve a strongly correlated spatial structure, which in turn creates niches for their expensive competitors. Thus an entire ecosystem of coexisting, discrete, symmetry-breaking strategies arises.

Suggested Citation

  • L. Mitchell & G. J. Ackland, 2007. "Strategy bifurcation and spatial inhomogeneity in a simple model of competing sellers," Papers physics/0703156, arXiv.org, revised Apr 2007.
    • Handle: RePEc:arx:papers:physics/0703156
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