Agent-Based Modeling and Simulation of Consumer Behavior Omid Roozmand Environmental Studies, Dartmouth College

Agent-Based Modeling and Simulation of Consumer Choice

Omid RoozmandEnvironmental Studies, Dartmouth College

Agent-Based Modeling and Simulation of Consumer Behavior Omid Roozmand Environmental Studies, Dartmouth College

Pictures: (Gilbert 2009)

Agent-Based Modeling

Introduction

An agent-based model is a class of computational models for simulating the actions and interactions of autonomous agents with a view to assessing their effects on the system as a whole. Wikipedia

Agent-Based Modeling and Simulation of Consumer Behavior Omid Roozmand Environmental Studies, Dartmouth College

Introduction

Consumer Behavior

Why do people need luxury products?

Agent-Based Modeling and Simulation of Consumer Behavior Omid Roozmand Environmental Studies, Dartmouth College

How Do Consumers Behave?

Introduction (Human Behavior)

Social

Cultural

Personal

Psychological

Agent-Based Modeling and Simulation of Consumer Behavior Omid Roozmand Environmental Studies, Dartmouth College

Sociological and Psychological

Theories

Consumer BehaviorAnd

Economics

Computer Science and

Artificial Intelligence

ABM of Consumer Behavior

ABM of Consumer Behavior

Five Stages model of Consumer Behavior

Agent-Based Technology- MASQ Meta Model

- Culture (Power Distance, Individualism, Masculinity, UA)- Personality: Big Five (OCEAN)- 6 Related Needs From Maslow, Max-Neef

Agent-Based Modeling and Simulation of Consumer Behavior Omid Roozmand Environmental Studies, Dartmouth College

Internal External

Mind

Culture

Body/Object

Space

ABM of Consumer Behavior

Agent-Based Model (MASQ Meta Model) (Ferber 2009)

Individual

Collective

Agent-Based Modeling and Simulation of Consumer Behavior Omid Roozmand Environmental Studies, Dartmouth College

Motivation

Consumer Behavior

Do we need it all?

Agent-Based Modeling and Simulation of Consumer Behavior Omid Roozmand Environmental Studies, Dartmouth College

CCAD

Maximizers: Consumers will find the best bundle of product regarding their budget constraints

Satisficers: Consumers are satisfied by any affordable bundle of items which provides a utility above their threshold. They are not looking for best bundle!

Maximizers vs. Satisficers

Agent-Based Modeling and Simulation of Consumer Behavior Omid Roozmand Environmental Studies, Dartmouth College

CCAD

Maximizers: We applied dynamic programming to find the best bundle

𝑏𝑢𝑛𝑑𝑙𝑒𝑏𝑒𝑠𝑡=𝑎𝑟𝑔𝑚𝑎𝑥

(𝑥1 ,𝑥2 ,… ,𝑥𝑛)∑𝑖=1

𝑛

𝑥 𝑖𝑢(𝑖𝑡𝑚𝑖)

Maximizers Algorithm

h𝑊 𝑒𝑟𝑒∑𝑖=1

𝑥 𝑖𝑝𝑖≤𝑏𝑢𝑑𝑔𝑒𝑡

Agent-Based Modeling and Simulation of Consumer Behavior Omid Roozmand Environmental Studies, Dartmouth College

Chromosome’s Utility: .

Satisficers: Genetic algorithm has been applied for satisficers to find the first affordable bundle.

Genetic Algorithm is a technique in computer science to find near optimum-solutions for search problems

Chromosome: Each chromosome includes a bundle of available products

Chromosome’s cost:

Feasible Chromosome: ().

Satisficers Algorithm

CCAD

Agent-Based Modeling and Simulation of Consumer Behavior Omid Roozmand Environmental Studies, Dartmouth College

CCAD

Items Price Utility

Item X 50 40

Item Y 30 20

Item Z 100 90

Chromosome 1 = <2, 1, 5>

Utility(Chromosome 1) = 2*40 + 1*20 + 5*90 = 550Cost(Chromosome 1) = 2*50 + 1*30 + 5*100 = 630

Agent-Based Modeling and Simulation of Consumer Behavior Omid Roozmand Environmental Studies, Dartmouth College

Satisficers Algorithm

CCAD

Initial Population

Sort Chromosomes

Crossover

Mutation

Re-Structure Chromosomes

Satisficing Chromosome has

been found

Yes

No

Agent-Based Modeling and Simulation of Consumer Behavior Omid Roozmand Environmental Studies, Dartmouth College

Maximizers- Income influence

CCAD- Results

Products1- Item X: Low-quality disposable items2- Item Y: Low-quality durable items3- Item Z: High-quality durable items

Consumer Agents100 Maximizers agents

System100 runs, and 6 months simulation

Agent-Based Modeling and Simulation of Consumer Behavior Omid Roozmand Environmental Studies, Dartmouth College

CCAD- Results

Maximizers vs. Satisficers

Agent-Based Modeling and Simulation of Consumer Behavior Omid Roozmand Environmental Studies, Dartmouth College

Maximizers vs. Satisficers

Satisficers purchase more than Maximizers!

CCAD- Results

Agent-Based Modeling and Simulation of Consumer Behavior Omid Roozmand Environmental Studies, Dartmouth College

Future Work

• Adding social norms to consumer agents decision process

• Building a social network and evaluating the effects of social norms on agents’ behavior

• Finding the effect of consumer behavior on resource scarcity!!

Agent-Based Modeling and Simulation of Consumer Behavior Omid Roozmand Environmental Studies, Dartmouth College

Future Work for Consumer behavior

Connection of GIS Simulation with our Agent-Based Platform