Market Model with Heterogeneous Buyers

TL;DR

This paper develops a market model incorporating heterogeneous buyers and multiple product variants, analyzing how vendor behavior is affected by information levels and correlations among buyers.

Contribution

It introduces a novel market modeling framework that accounts for buyer heterogeneity and product variants, providing insights into vendor behavior under different informational and correlation conditions.

Findings

Vendor behavior varies with information availability.

Correlations among buyers influence market dynamics.

Heterogeneous preferences enable modeling of complex market phenomena.

Abstract

In market modeling, one often treats buyers as a homogeneous group. In this paper we consider buyers with heterogeneous preferences and products available in many variants. Such a framework allows us to successfully model various market phenomena. In particular, we investigate how is the vendor's behavior influenced by the amount of available information and by the presence of correlations in the system.