Do the attributes of products matter for success in social network markets?

Paul Ormerod*, Bassel Tarbush, R. Alexander Bentley

*Corresponding author for this work

Research output: Chapter in Book/Report/Conference proceedingConference Contribution (Conference Proceeding)

1 Citation (Scopus)

Abstract

In social network markets, the act of consumer choice is governed not just by the set of incentives described by conventional consumer demand theory, but by the choices of others in which an individuals payoff is an explicit function of the actions of others. We observe two key empirical features of outcomes in such markets. First, a highly right-skewed, non-Gaussian distribution of the number of times competing alternatives are selected at a point in time. Second, there is turnover in the rankings of popularity over time. We show that such outcomes can arise either when there is no alternative which exhibits inherent superiority in its attributes, or when agents find it very difficult to discern any differences in quality amongst the alternatives which are available so that it is as if no superiority exists. These features appear to obtain, as a reasonable approximation, in many social network markets.

Original languageEnglish
Title of host publicationProceedings - Winter Simulation Conference
DOIs
Publication statusPublished - 1 Dec 2012
Event2012 Winter Simulation Conference, WSC 2012 - Berlin, United Kingdom
Duration: 9 Dec 201212 Dec 2012

Conference

Conference2012 Winter Simulation Conference, WSC 2012
CountryUnited Kingdom
CityBerlin
Period9/12/1212/12/12

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