Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
976431 | Physica A: Statistical Mechanics and its Applications | 2008 | 7 Pages |
Abstract
Network marketing has been proposed and used as a way to spread the product information to consumers through social connections. We extend the previous game model of the network marketing on a small-world tree network and propose two games: In the first model with the bounded rationality, each consumer makes purchase decision stochastically, while in the second model, consumers get only partial information due to the finite length of social connections. Via extensive numerical simulations, we find that as the rationality is enhanced not only the consumer surplus but also the firm’s profit is increased. The implication of our results is also discussed.
Related Topics
Physical Sciences and Engineering
Mathematics
Mathematical Physics
Authors
Hoang Anh Tuan Kiet, Beom Jun Kim,