CONTEMPORARY APPROACH TO MODELING NETWORK EXTERNALITIES

Ekonomski fakultet Univerziteta u Nišu, Srbija
Serbia

Ekonomski fakultet Univerziteta u Nišu, Srbija
Serbia

Ekonomski fakultet Univerziteta u Nišu, Srbija
Serbia


Abstract

With increasing computational power and software development comes greater opportunities to supplement traditional research methods with new alternative methods. This paper examines the advantages of an agent-based approach to modeling network externalities, as well as the implementation of the theoretical model of the monopoly market. The advantage of this approach is easily create simple rules and introduce heterogeneous participants and interactions in the model. A special emphasis is placed on the implementation of the diffusion model of product innovation. First we will give an overview of the theoretical framework and expand the model by introducing a diverse set of heterogeneous factors and constraints on the behavior of market participants in order to demonstrate the development of the theoretical model. In this paper, the analysis will be based on relevant literature on network externalities. Then we will construct a theoretical model Agent-based Computational Economics on which the simulations will be based.

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References


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