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Showing or telling? Local interaction and organization of behavior

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  • Zakaria Babutsidze

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  • Robin Cowan

    ()

Abstract

We present a choice model based on agent interaction. Interaction is modeled as face-to-face communication that takes place on a regular periodic lattice with decision-makers exchanging information only with immediate neighbors. We investigate the long-run (equilibrium) behavior of the resulting system and show that for a large range of initial conditions clustering in economic behavior emerges and persists indefinitely. Unlike many models in the literature, our model allows for the analysis of multi-option environments. Therefore, we add to existing results by deriving the equilibrium distribution of option popularity and thus, implicitly, of market shares. Additionally, the model sheds new light on the emergence of the novel behavior in societies. Copyright Springer-Verlag Berlin Heidelberg 2014

Suggested Citation

  • Zakaria Babutsidze & Robin Cowan, 2014. "Showing or telling? Local interaction and organization of behavior," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 9(2), pages 151-181, October.
  • Handle: RePEc:spr:jeicoo:v:9:y:2014:i:2:p:151-181
    DOI: 10.1007/s11403-013-0117-x
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    References listed on IDEAS

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    Cited by:

    1. Zakaria Babutsidze, 2016. "Innovation, competition and firm size distribution on fragmented markets," Journal of Evolutionary Economics, Springer, vol. 26(1), pages 143-169, March.
    2. repec:eee:ecolec:v:146:y:2018:i:c:p:290-303 is not listed on IDEAS

    More about this item

    Keywords

    Interaction; Inertia; Clustering; Choice; D83;

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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