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Emergence of product differentiation from consumer heterogeneity and asymmetric information

Author

Listed:
  • Linyuan Lu
  • Matus Medo
  • Yi-Cheng Zhang
  • Damien Challet

Abstract

We introduce a fully probabilistic framework of consumer product choice based on quality assessment. It allows us to capture many aspects of marketing such as partial information asymmetry, quality differentiation, and product placement in a supermarket.

Suggested Citation

  • Linyuan Lu & Matus Medo & Yi-Cheng Zhang & Damien Challet, 2008. "Emergence of product differentiation from consumer heterogeneity and asymmetric information," Papers 0804.1229, arXiv.org, revised Jun 2008.
    • Handle: RePEc:arx:papers:0804.1229
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    References listed on IDEAS

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    1. Joseph E. Stiglitz & G. Frank Mathewson (ed.), 1986. "New Developments in the Analysis of Market Structure," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262690934, April.
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    Cited by:

    1. Gao, Fujuan & Fenoaltea, Enrico Maria & Zhang, Yi-Cheng, 2023. "Market failure in a new model of platform design with partially informed consumers," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 619(C).
    2. Enrico Maria Fenoaltea & Izat B. Baybusinov & Jianyang Zhao & Lei Zhou & Yi-Cheng Zhang, 2021. "The Stable Marriage Problem: an Interdisciplinary Review from the Physicist's Perspective," Papers 2103.11458, arXiv.org.
    3. Tilles, Paulo F.C. & Ferreira, Fernando F. & Francisco, Gerson & Pereira, Carlos de B. & Sarti, Flavia M., 2011. "A Markovian model market—Akerlof’s lemons and the asymmetry of information," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 390(13), pages 2562-2570.
    4. Liao, Hao & Xiao, Rui & Chen, Duanbing & Medo, Matúš & Zhang, Yi-Cheng, 2014. "Firm competition in a probabilistic framework of consumer choice," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 400(C), pages 47-56.

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