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This model studies the impact of opinion leaders ("stars") and her fans
on equilibrium market prices within the Bell’s model (JEBO 2002).
There are two kinds of agents: "ordinary people" and one "opinion leader". All ordinary agents consume two comparable kinds of goods (e.g. white and black t-shirts). The opinion leader consumes only good 1 (the white t-shirts). In every period, all agents get an initial endowment of each good which they exchange with each other at the centralized market at the market clearing price. The ordinary agents’ preferences evolve over the time: each ordinary agent increases her preference for the good that has been recently more popular (i.e. more consumed) in her neighborhood. Her neighborhood consists of three parts: 1) the agent herself, 2) her eight closest agents, and 3) the opinion leader, if the agent is her fan. The opinion leaders’ preferences do not change in time.
There are three variants of the model: 1) the "grid" model, i.e. Bell’s original model without the opinion leader and her fans where agent 1 was treated as an ordinary agent, 2) the "grid with one stubborn" model, i.e. an intermediate model where agent 1 stubbornly prefers good 1 at each t but had no fans, and 3) the "grid with one oppinion leader" model, i.e. the full model described above. The three variants can be straightforwardly compared because only the initialization is stochastic (the rest of the simulation is deterministic), and the order of steps in the initialization secures that the common part of each two variants is the same for each initial random seed.
You can either set parameters yourself, or use prearranged scenarios. Then pres SETUP button and then GO button. Observe.
When you use prearranged scenarios, try to change the type of the network, and observe the differences. Do not forget to set scenario to manaul setting in such a case.
Notice there are four possible outcomes of the simulations:
Surprisingly, the relative price of the white t-shirts that are consumed by the opinion leader can decrease when the leader is added to the model (the model changes from the "grid" model to the "grid with one stubborn" model), and also when the fans are added to agent 1 (the model changes from the "grid with one stubborn" model to the "grid with one oppinion leader".
Try prearranged scenarios. They cover some of the possible interesting results.
I’m sorry I won’t suggest anything. I’ve got some ideas but I’d like to save them for a future paper. ;-)
The model uses links.
The model is based on Bell’s model and my older generalization of it, see below.