This paper is concerned with clustering in demand. We present a discrete choice model of consumption that incorporates habit formation and information exchange among consumers in fixed social networks. We provide an analytical solution to a special case of the model by using technical tools from...

We present a discrete choice model of consumption that incorporates two empirically validated aspects of consumer behaviour: inertia in consumption and interaction among consumers. We specify the interaction structure as a regular lattice with consumers interacting only with immediate...

In this paper I review the evidence from marketing and psychology literature about the purchase behavior of consumers. I concentrate on the characteristics of the choice process, choice of the external information source and nature of the information obtained from these sources. The impact of...

This paper presents a simple boundedly rational model of a firm and consumer behaviour. We formulate an entry game, where every firm decides on investing in R&D for inventing a new product that will appeal to certain group of consumers. The success depends on the amount of funds available for...

In this paper I present a model of asymmetric pricing. Firms here follow the (S,s) pricing rule with different lengths of tails. I use numerical simulations with four-state shocks to detect the link between the present asymmetry in pricing on the micro level and asymmetry in aggregate output...

This paper presents the computational model of consumer behaviour. We consider two sources of product specic consumer skill acquisition, termed here as learning how to consume: learning by consuming and consumer socialization. Consumers utilize these two sources in order to derive higher...

Although intuitively appealing (and common), drawing network strategy implications from empirical evidence of network performance effects in pooled cross-section is not necessarily warranted. This is because network positions can influence both the mean and variance of firm performance....

Over the twentieth century universities in the industrialized world have evolved from being "universities of culture" to "universities of innovation." Policy makers and universities themselves see that one of their major roles is supporting industrial innovation and thus economic growth. We...

Innovation is a source of increasing productivity, but it is also a source of stress. Psychological research shows that moderate stress increases the productivity of an actor, but above a certain level, additional stress decreases productivity. Stress is reduced by coping behaviour of the actor,...

Network formation is often said to be driven by social capital considerations. A typical pattern observed in the empirical data on strategic alliances is that of small world networks: dense subgroups of firms interconnected by (few) clique-spanning ties. The typical argument is that there is...