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Agent-based simulation of consumer purchase decision-making and the decoy effect

Authors
Journal
Journal of Business Research
0148-2963
Publisher
Elsevier
Publication Date
Volume
60
Issue
8
Identifiers
DOI: 10.1016/j.jbusres.2007.02.006
Keywords
  • Agent
  • Motivation Function
  • Price Sensitivity
  • Quality Sensitivity
Disciplines
  • Communication
  • Economics
  • Engineering
  • Psychology

Abstract

Abstract Consumer behavior research involves various areas: psychology, marketing, sociology, economics and engineering. This paper presents an agent-based model (ABM) of consumer purchase decision-making. The core of this model is a motivation function that combines consumers' psychological personality traits with two important kinds of interactions in a competitive market. The model reveals the inner psychological mechanism on the basis of which consumers make their choices when facing competing brands on the market. By creating a large number of heterogeneous consumer agents in an artificial market, this study uses multi-agent simulation (MAS) to exhibit the emergent decoy effect phenomenon, which is a market dynamic phenomenon originating from the individual behavior of heterogeneous consumers and their interactions in the real-world complex market. The combined use of the ABM and the MAS method in studying consumer behavior and markets gives one the potential to cope with the dynamic changes and complexities in the real-world business environment.

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