A MODEL OF HERDING BEHAVIOR IN THE FORMATION OF DEMAND

PII
S042473880000616-6-1
DOI
10.31857/S0000616-6-1
Publication type
Article
Status
Published
Authors
Volume/ Edition
Volume / Issue №1
Pages
101-109
Abstract
The simple example of herd behavior when most of consumers choose one from two restaurants similar in qualities and prices of goods, was considered by G. Becker. Asymmetric choice of consumers is observable in the symmetric situation, which consisted in two similar and located near each other restaurant: one of restaurants is often more popular for consumers. The model of behavior of consumers in the example is formulated and investigated in this paper. The change of consumer’s preference occurs in this model as a result of interactions of a pair of consumers. It is shown, that expected number of consumers preferring each restaurant, which equals a half of all consumers, corresponds to stationary distribution in case of equal prices in the restaurants. The state of the system, in which half of consumers prefers each restaurant, is most probable. This means absence of herd behavior for consumers at described use by consumer of local information.
Keywords
-
Date of publication
01.01.2009
Number of purchasers
0
Views
897

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