Bertrand Competition with Network Effects and Switching Costs: An Agent-based Computational Approach

Year 2016, Volume: 2 Issue: 1, 65 - 86, 20.05.2016

Kutay Hakkı Çilingiroğlu

Abstract

Economics is a complex system that requires different approaches for analysis. I analyzed switching costs and network effects together with a new simulation approach to modeling systems composed of autonomous and interacting agents. Agent based computational economics is one of the simulation tools and an efficient tool box for complex economic systems. I developed an agent based computational model of duopolistic competition to analyze how the network eects and switching costs shape competitive outcomes by simulation methods.

Keywords

Agent-based Computational Economics, Switching Costs, Network Eects, Simulation

References

• Arthur, W.B. (1989): "Competing Technologies, Increasing Returns, and Lock-In by Historical Events", Economic Journal 99, 116-131.