Agents in Economic Markets and Games
129
Figure 6.4(a) shows the average savings of all customer types. The
shoplifters, since not spending save vast amounts compared to the others. The
customers who keep buying from their favorite shop, despite of price increases,
save the least in all five types. The other three customer types seems to save
equally, even if they buy from cheap shops, randomly or buy from other recommended shops. Figure 6.4(b) compares the average income of shops with
number of shoplifters in the system. The shops earn and save money with
lesser shoplifters, than with more shoplifters. Figure 6.4(c) compares the average income of shops with number of random buyers. When there are more
customers who buy at random, the average income of the shops is seen to increase. Figure 6.4(d) compares the average income of shops, if the customers
who buy from their favorite or recommended by others is varied. If customers
keep buying from their favorite shops, the shops are seen to earn more as the
prices increase. But customers who buy on recommendations, seem to be loosing the most. This shows shops profit more by being recommended by other
customers.
6.3 Learning Firms in a Cournot Model
The Cournot model is an economic mathematical model, implies a centralized model and works similar to the demand and supply curve. All firms
produce a quantity of one type of good, where price is a central variable
which connects all firms. Companies are constantly competing against each
other over product sales and product demands in a market scenario trying
to keep their profits high (Figure 6.5). Thus the price of a product affects
all transactions and can be viewed as a central mediator in market scenarios.
However, this only applies for homogeneous goods, ignoring products with
wide variety and quality that influence market sales.
1
2
3
4
5
FIGURE 6.5: Five firms producing a particular output of the same product
in the scenario.
Adopting this theory, various mathematical models have been developed
in traditional economics to portray this concept of competition.
129
Figure 6.4(a) shows the average savings of all customer types. The
shoplifters, since not spending save vast amounts compared to the others. The
customers who keep buying from their favorite shop, despite of price increases,
save the least in all five types. The other three customer types seems to save
equally, even if they buy from cheap shops, randomly or buy from other recommended shops. Figure 6.4(b) compares the average income of shops with
number of shoplifters in the system. The shops earn and save money with
lesser shoplifters, than with more shoplifters. Figure 6.4(c) compares the average income of shops with number of random buyers. When there are more
customers who buy at random, the average income of the shops is seen to increase. Figure 6.4(d) compares the average income of shops, if the customers
who buy from their favorite or recommended by others is varied. If customers
keep buying from their favorite shops, the shops are seen to earn more as the
prices increase. But customers who buy on recommendations, seem to be loosing the most. This shows shops profit more by being recommended by other
customers.
6.3 Learning Firms in a Cournot Model
The Cournot model is an economic mathematical model, implies a centralized model and works similar to the demand and supply curve. All firms
produce a quantity of one type of good, where price is a central variable
which connects all firms. Companies are constantly competing against each
other over product sales and product demands in a market scenario trying
to keep their profits high (Figure 6.5). Thus the price of a product affects
all transactions and can be viewed as a central mediator in market scenarios.
However, this only applies for homogeneous goods, ignoring products with
wide variety and quality that influence market sales.
1
2
3
4
5
FIGURE 6.5: Five firms producing a particular output of the same product
in the scenario.
Adopting this theory, various mathematical models have been developed
in traditional economics to portray this concept of competition.