This model aims to explore its potential origins from the perspective of consumer types. By theoretically examining the impact of consumer type on market structure, this study assumes sellers to be homogeneous, while categorizing consumers based on two dimensions: risk-taking tendency (preference for new products over old ones) and pickiness tendency (likelihood to give negative rather than positive ratings). An agent-based simulation model is developed to examine the trends of market concentration ratios under diverse conditions.

The simulation findings indicate that consumers’ risk-taking tendency influences market concentration and volatility. Specifically, higher risk preference tends to reduce market concentration, making it more volatile. Similarly, the higher the consumers’ pickiness tendency, the more it hinders market concentration. Additionally, the relative weight of word-of-mouth (WoM) plays a crucial role in market dynamics. When sales have greater weight, market concentration is more likely. However, if WoM becomes more influential, concentration depends on the dominance of positive or negative ratings. Positive ratings strengthen sales’ role in promoting concentration, while negative ratings suppress it. This research aligns with existing market structure theories and has implications for e-retailers and administrators.