Entanglement between demand and supply in markets with bandwagon goods

Autores
Gordon, Mirta B.; Nadal, Jean Pierre; Phan, Denis; Semeshenko, Viktoriya
Año de publicación
2013
Idioma
inglés
Tipo de recurso
artículo
Estado
versión publicada
Descripción
Whenever customers’ choices (e.g. to buy or not a given good) depend on others choices (cases coined ‘positive externalities’ or ‘bandwagon effect’ in the economic literature), the demand may be multiply valued: for a same posted price, there is either a small number of buyers, or a large one—in which case one says that the customers coordinate. This leads to a dilemma for the seller: should he sell at a high price, targeting a small number of buyers, or at low price targeting a large number of buyers? In this paper we show that the interaction between demand and supply is even more complex than expected, leading to what we call the curse of coordination: the pricing strategy for the seller which aimed at maximizing his profit corresponds to posting a price which, not only assumes that the customers will coordinate, but also lies very near the critical price value at which such high demand no more exists. This is obtained by the detailed mathematical analysis of a particular model formally related to the Random Field Ising Model and to a model introduced in social sciences by T.C. Schelling in the 70’s.
Fil: Gordon, Mirta B.. Institut National de Recherche en Informatique et en Automatique; Francia. Universite Joseph Fourier; Francia. Centre National de la Recherche Scientifique; Francia
Fil: Nadal, Jean Pierre. École des Hautes Études en Sciences Sociales; Francia. Université Paris Diderot - Paris 7; Francia. Centre National de la Recherche Scientifique. Ecole Normale Supérieure; Francia
Fil: Phan, Denis. Université de Paris IV Paris-Sorbonne; Francia
Fil: Semeshenko, Viktoriya. Universidad de Buenos Aires. Facultad de Ciencias Económicas; Argentina. Consejo Nacional de Investigaciones Científicas y Técnicas; Argentina
Materia
Choice under social influence
Pricing
RFIM
Schelling
Nivel de accesibilidad
acceso abierto
Condiciones de uso
https://creativecommons.org/licenses/by-nc-sa/2.5/ar/
Repositorio
CONICET Digital (CONICET)
Institución
Consejo Nacional de Investigaciones Científicas y Técnicas
OAI Identificador
oai:ri.conicet.gov.ar:11336/24089
Acceder
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network_acronym_str CONICETDig
repository_id_str 3498
network_name_str CONICET Digital (CONICET)
spelling Entanglement between demand and supply in markets with bandwagon goodsGordon, Mirta B.Nadal, Jean PierrePhan, DenisSemeshenko, ViktoriyaChoice under social influencePricingRFIMSchellinghttps://purl.org/becyt/ford/5.2https://purl.org/becyt/ford/5Whenever customers’ choices (e.g. to buy or not a given good) depend on others choices (cases coined ‘positive externalities’ or ‘bandwagon effect’ in the economic literature), the demand may be multiply valued: for a same posted price, there is either a small number of buyers, or a large one—in which case one says that the customers coordinate. This leads to a dilemma for the seller: should he sell at a high price, targeting a small number of buyers, or at low price targeting a large number of buyers? In this paper we show that the interaction between demand and supply is even more complex than expected, leading to what we call the curse of coordination: the pricing strategy for the seller which aimed at maximizing his profit corresponds to posting a price which, not only assumes that the customers will coordinate, but also lies very near the critical price value at which such high demand no more exists. This is obtained by the detailed mathematical analysis of a particular model formally related to the Random Field Ising Model and to a model introduced in social sciences by T.C. Schelling in the 70’s.Fil: Gordon, Mirta B.. Institut National de Recherche en Informatique et en Automatique; Francia. Universite Joseph Fourier; Francia. Centre National de la Recherche Scientifique; FranciaFil: Nadal, Jean Pierre. École des Hautes Études en Sciences Sociales; Francia. Université Paris Diderot - Paris 7; Francia. Centre National de la Recherche Scientifique. Ecole Normale Supérieure; FranciaFil: Phan, Denis. Université de Paris IV Paris-Sorbonne; FranciaFil: Semeshenko, Viktoriya. Universidad de Buenos Aires. Facultad de Ciencias Económicas; Argentina. Consejo Nacional de Investigaciones Científicas y Técnicas; ArgentinaSpringer2013-05info:eu-repo/semantics/articleinfo:eu-repo/semantics/publishedVersionhttp://purl.org/coar/resource_type/c_6501info:ar-repo/semantics/articuloapplication/pdfapplication/pdfapplication/pdfhttp://hdl.handle.net/11336/24089Gordon, Mirta B.; Nadal, Jean Pierre; Phan, Denis; Semeshenko, Viktoriya; Entanglement between demand and supply in markets with bandwagon goods; Springer; Journal of Statistical Physics; 151; 3-4; 5-2013; 494-5220022-47151572-9613CONICET DigitalCONICETenginfo:eu-repo/semantics/altIdentifier/url/http://link.springer.com/article/10.1007%2Fs10955-012-0660-1info:eu-repo/semantics/altIdentifier/doi/10.1007/s10955-012-0660-1info:eu-repo/semantics/altIdentifier/url/https://arxiv.org/abs/1209.1321info:eu-repo/semantics/openAccesshttps://creativecommons.org/licenses/by-nc-sa/2.5/ar/reponame:CONICET Digital (CONICET)instname:Consejo Nacional de Investigaciones Científicas y Técnicas2026-04-15T10:54:00Zoai:ri.conicet.gov.ar:11336/24089instacron:CONICETInstitucionalhttp://ri.conicet.gov.ar/Organismo científico-tecnológicoNo correspondehttp://ri.conicet.gov.ar/oai/requestdasensio@conicet.gov.ar; lcarlino@conicet.gov.arArgentinaNo correspondeNo correspondeNo correspondeopendoar:34982026-04-15 10:54:00.528CONICET Digital (CONICET) - Consejo Nacional de Investigaciones Científicas y Técnicasfalse
dc.title.none.fl_str_mv Entanglement between demand and supply in markets with bandwagon goods
title Entanglement between demand and supply in markets with bandwagon goods
spellingShingle Entanglement between demand and supply in markets with bandwagon goods
Gordon, Mirta B.
Choice under social influence
Pricing
RFIM
Schelling
title_short Entanglement between demand and supply in markets with bandwagon goods
title_full Entanglement between demand and supply in markets with bandwagon goods
title_fullStr Entanglement between demand and supply in markets with bandwagon goods
title_full_unstemmed Entanglement between demand and supply in markets with bandwagon goods
title_sort Entanglement between demand and supply in markets with bandwagon goods
dc.creator.none.fl_str_mv Gordon, Mirta B.
Nadal, Jean Pierre
Phan, Denis
Semeshenko, Viktoriya
author Gordon, Mirta B.
author_facet Gordon, Mirta B.
Nadal, Jean Pierre
Phan, Denis
Semeshenko, Viktoriya
author_role author
author2 Nadal, Jean Pierre
Phan, Denis
Semeshenko, Viktoriya
author2_role author
author
author
dc.subject.none.fl_str_mv Choice under social influence
Pricing
RFIM
Schelling
topic Choice under social influence
Pricing
RFIM
Schelling
purl_subject.fl_str_mv https://purl.org/becyt/ford/5.2
https://purl.org/becyt/ford/5
dc.description.none.fl_txt_mv Whenever customers’ choices (e.g. to buy or not a given good) depend on others choices (cases coined ‘positive externalities’ or ‘bandwagon effect’ in the economic literature), the demand may be multiply valued: for a same posted price, there is either a small number of buyers, or a large one—in which case one says that the customers coordinate. This leads to a dilemma for the seller: should he sell at a high price, targeting a small number of buyers, or at low price targeting a large number of buyers? In this paper we show that the interaction between demand and supply is even more complex than expected, leading to what we call the curse of coordination: the pricing strategy for the seller which aimed at maximizing his profit corresponds to posting a price which, not only assumes that the customers will coordinate, but also lies very near the critical price value at which such high demand no more exists. This is obtained by the detailed mathematical analysis of a particular model formally related to the Random Field Ising Model and to a model introduced in social sciences by T.C. Schelling in the 70’s.
Fil: Gordon, Mirta B.. Institut National de Recherche en Informatique et en Automatique; Francia. Universite Joseph Fourier; Francia. Centre National de la Recherche Scientifique; Francia
Fil: Nadal, Jean Pierre. École des Hautes Études en Sciences Sociales; Francia. Université Paris Diderot - Paris 7; Francia. Centre National de la Recherche Scientifique. Ecole Normale Supérieure; Francia
Fil: Phan, Denis. Université de Paris IV Paris-Sorbonne; Francia
Fil: Semeshenko, Viktoriya. Universidad de Buenos Aires. Facultad de Ciencias Económicas; Argentina. Consejo Nacional de Investigaciones Científicas y Técnicas; Argentina
description Whenever customers’ choices (e.g. to buy or not a given good) depend on others choices (cases coined ‘positive externalities’ or ‘bandwagon effect’ in the economic literature), the demand may be multiply valued: for a same posted price, there is either a small number of buyers, or a large one—in which case one says that the customers coordinate. This leads to a dilemma for the seller: should he sell at a high price, targeting a small number of buyers, or at low price targeting a large number of buyers? In this paper we show that the interaction between demand and supply is even more complex than expected, leading to what we call the curse of coordination: the pricing strategy for the seller which aimed at maximizing his profit corresponds to posting a price which, not only assumes that the customers will coordinate, but also lies very near the critical price value at which such high demand no more exists. This is obtained by the detailed mathematical analysis of a particular model formally related to the Random Field Ising Model and to a model introduced in social sciences by T.C. Schelling in the 70’s.
publishDate 2013
dc.date.none.fl_str_mv 2013-05
dc.type.none.fl_str_mv info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
http://purl.org/coar/resource_type/c_6501
info:ar-repo/semantics/articulo
format article
status_str publishedVersion
dc.identifier.none.fl_str_mv http://hdl.handle.net/11336/24089
Gordon, Mirta B.; Nadal, Jean Pierre; Phan, Denis; Semeshenko, Viktoriya; Entanglement between demand and supply in markets with bandwagon goods; Springer; Journal of Statistical Physics; 151; 3-4; 5-2013; 494-522
0022-4715
1572-9613
CONICET Digital
CONICET
url http://hdl.handle.net/11336/24089
identifier_str_mv Gordon, Mirta B.; Nadal, Jean Pierre; Phan, Denis; Semeshenko, Viktoriya; Entanglement between demand and supply in markets with bandwagon goods; Springer; Journal of Statistical Physics; 151; 3-4; 5-2013; 494-522
0022-4715
1572-9613
CONICET Digital
CONICET
dc.language.none.fl_str_mv eng
language eng
dc.relation.none.fl_str_mv info:eu-repo/semantics/altIdentifier/url/http://link.springer.com/article/10.1007%2Fs10955-012-0660-1
info:eu-repo/semantics/altIdentifier/doi/10.1007/s10955-012-0660-1
info:eu-repo/semantics/altIdentifier/url/https://arxiv.org/abs/1209.1321
dc.rights.none.fl_str_mv info:eu-repo/semantics/openAccess
https://creativecommons.org/licenses/by-nc-sa/2.5/ar/
eu_rights_str_mv openAccess
rights_invalid_str_mv https://creativecommons.org/licenses/by-nc-sa/2.5/ar/
dc.format.none.fl_str_mv application/pdf
application/pdf
application/pdf
dc.publisher.none.fl_str_mv Springer
publisher.none.fl_str_mv Springer
dc.source.none.fl_str_mv reponame:CONICET Digital (CONICET)
instname:Consejo Nacional de Investigaciones Científicas y Técnicas
reponame_str CONICET Digital (CONICET)
collection CONICET Digital (CONICET)
instname_str Consejo Nacional de Investigaciones Científicas y Técnicas
repository.name.fl_str_mv CONICET Digital (CONICET) - Consejo Nacional de Investigaciones Científicas y Técnicas
repository.mail.fl_str_mv dasensio@conicet.gov.ar; lcarlino@conicet.gov.ar
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score 13.203462

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