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Market Organisation and Trading Relationships

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Author Info
Weisbuch, G.
Kirman, A.
Herreiner, D.

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Abstract

This paper analyses the evolution of trading relationships in a market in which trades take place bilaterally. Buyers reinforce their probability of visiting sellers as a function of the profitability of their past experience. Using the "mean field" approach it is shown that two distant types of behaviour "loyalist" and "shopper" emerge and that the transition from one to the other is abrupt. These results are confirmed by simulations of more complicated versions of the model.

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Publisher Info
Paper provided by Universite Aix-Marseille III in its series G.R.E.Q.A.M. with number 98a32.

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Length: 33 pages
Date of creation: 1998
Date of revision:
Handle: RePEc:fth:aixmeq:98a32

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Postal: G.R.E.Q.A.M., (GROUPE DE RECHERCHE EN ECONOMIE QUANTITATIVE D'AIX MARSEILLE), CENTRE DE VIEILLE CHARITE, 2 RUE DE LA CHARITE, 13002 MARSEILLE.
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Related research
Keywords: LEARNING ; MARKETS ; GOODS ; CONSUMPTION;

Other versions of this item:

Find related papers by JEL classification:
D4 - Microeconomics - - Market Structure and Pricing
L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
Q22 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Fishery

Cited by:
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  2. I V Evstigneev & M I Taksar, 2005. "Random Field Models of Microeconomic Dynamics," The School of Economics Discussion Paper Series 0516, Economics, The University of Manchester. [Downloadable!]
  3. Alan Kirman & Sheri Markose & Simone Giasante & Paolo Pin, 2007. "Marginal contribution, reciprocity and equity in segregated groups: Bounded rationality and self-organization in social networks," Economics Discussion Papers 629, University of Essex, Department of Economics. [Downloadable!]
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  5. Cowan,Robin, 2004. "Network models of innovation and knowledge diffusion," Research Memoranda 016, Maastricht : MERIT, Maastricht Economic Research Institute on Innovation and Technology. [Downloadable!]
  6. Giorgio Fagiolo, 2005. "A Note on Equilibrium Selection in Polya-Urn Coordination Games," Economics Bulletin, Economics Bulletin, vol. 3(45), pages 1-14. [Downloadable!]
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  8. Ed Hopkins, 2004. "Adaptive Learning Models of Consumer Behaviour," ESE Discussion Papers 121, Edinburgh School of Economics, University of Edinburgh. [Downloadable!]
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  9. Giorgio Fagiolo & Marco Valente, 2005. "Minority Games, Local Interactions, and Endogenous Networks," Computational Economics, Springer, vol. 25(1), pages 41-57, February. [Downloadable!] (restricted)
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  10. G\'erard Weisbuch & Vincent Buskens & Luat Vuong, 2007. "Heterogeneity and Increasing Returns May Drive Socio-Economic Transitions," Quantitative Finance Papers 0706.1454, arXiv.org. [Downloadable!]
  11. Guido Fioretti, 2002. "Knowledge and Structure," Industrial Organization 0207011, EconWPA. [Downloadable!]
  12. Gorobets, A. & Nooteboom, B., 2004. "Agent based computational model of trust," Research Paper ERS-2004-108-ORG Revision, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus Uni. [Downloadable!]
  13. Yann Bramoullé & John A. List & Michael K. Price, 2007. "On the Formation of Buyer-Seller Relationships when Product Quality is Perfectly Observable," Cahiers de recherche 0740, CIRPEE. [Downloadable!]
  14. Francis Bloch (GREQAM and Universite de la Mediterranee), Garance Genicot (Georgetown University, and Debraj Ray (New York University and Instituto de Analisis Economico (CSIC)), . "Informal Insurance in Social Networks," Working Papers gueconwpa~04-04-16, Georgetown University, Department of Economics. [Downloadable!]
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  15. Andreas Pyka & Paul Windrum, 2003. "The Self-Organisation Of Strategic Alliances," Economics of Innovation and New Technology, Taylor and Francis Journals, vol. 12(3), pages 245-268, January. [Downloadable!] (restricted)
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