Computational Model Library

Building upon the distance-based Hotelling’s differentiation idea, we describe the behavioral experience of several prototypes of consumers, who walk a hypothetical cognitive path in an attempt to maximize their satisfaction.

Objective is to simulate policy interventions in an integrated demand-supply model. The underlying demand function links both sides. Diffusion proceeds if interactions distribute awareness (Epidemic effect) and rivalry reduces the market price (Probit effect). Endogeneity is given due to the fact that consumer awareness as well as their willingness-to-pay drives supply-side rivalry. Firm´s entry and exit decisions as well as quantity and price settings are driven by Cournot competition.

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