1 research outputs found
Outflow Dynamics in Modeling Oligopoly Markets: The Case of the Mobile Telecommunications Market in Poland
In this paper we introduce two models of opinion dynamics in oligopoly
markets and apply them to a situation, where a new entrant challenges two
incumbents of the same size. The models differ in the way the two forces
influencing consumer choice -- (local) social interactions and (global)
advertising -- interact. We study the general behavior of the models using the
Mean Field Approach and Monte Carlo simulations and calibrate the models to
data from the Polish telecommunications market. For one of the models
criticality is observed -- below a certain critical level of advertising the
market approaches a lock-in situation, where one market leader dominates the
market and all other brands disappear. Interestingly, for both models the best
fits to real data are obtained for conformity level . This
agrees very well with the conformity level found by Solomon Asch in his famous
social experiment