Luca Riccetti - The relevance for market exchanges of local interaction, heterogeneity and model scale

  • Presenting author: Luca Riccetti (University of Macerata)

  • Authors: Jacopo Di Domenica, Luca Riccetti

  • Session: B01C - Agent-Based Modelling - Tuesday 9:00-10:30 - Senate Hall

  • Slides: PDF

We perform a simple model of market exchanges where buyers and sellers are placed in different space settings and are able to meet only counterparts within a certain radius around them, that is they interact in markets with various levels of imperfect information. In particular, we place buyers and sellers using the following space settings: equally spaced or randomly set with location extracted from a Uniform distribution or a Normal distribution (also with different centers of the distributions for buyers and sellers) or a Student-t distribution. Sellers offer a good that could be of high or low quality. Buyers can be available to buy both types of good at a different price, or can be available to buy only the good of high or of low quality. Sellers can offer the goods at a fixed price or with heterogenous prices. In the latter case, buyers choose the good with the lowest price. The matching mechanism is very simple: we create a random list for the buyers, then the first in the list is the first who searches for a seller and so on. The number of buyers and sellers can change. For each setting, we perform a sensitivity analysis on the radius parameter, that is we try different radius: buyers can observe sellers located from a very small range around them to a very large range including all the space. Then, for each level of the radius, we check how many sellers/buyers manage to sell/buy the good and, in the case of different prices, we also check the distribution of the prices realized in the exchanges. We find highly non linear dynamics of the number of realized exchanges when the radius changes. Moreover, the interaction of the reported features (location, heterogeneity, number of agents) create complex variations in the results.