Related papers: Spatial competition and price formation
Addressing issues of social diversity, we introduce a model of housing transactions between agents who are heterogeneous in their willingness to pay. A key assumption is that agents' preferences for a location depend on both an intrinsic…
We introduce pricing formulas for competition and collusion models of two-sided markets with an outside option. For the competition model, we find conditions under which prices and consumer surplus may increase or decrease if the outside…
Regular vegetation patterns in semiarid ecosystems are believed to arise from the interplay between long-range competition and facilitation processes acting at smaller distances. We show that, under rather general conditions, long-range…
We consider an optimization problem in a given region $Q$ where an agent has to decide the price $p(x)$ of a product for every $x\in Q$. The customers know the pricing pattern $p$ and may shop at any place $y$, paying the cost $p(y)$ and…
I study symmetric competitions in which each player chooses an arbitrary distribution over a one-dimensional performance index, subject to a convex cost. I establish existence of a symmetric equilibrium, document various properties it must…
Pricing decisions of companies require an understanding of the causal effect of a price change on the demand. When real-life pricing experiments are infeasible, data-driven decision-making must be based on alternative data sources such as…
In complex systems, many different parts interact in non-obvious ways. Traditional research focuses on a few or a single aspect of the problem so as to analyze it with the tools available. To get a better insight of phenomena that emerge…
Understanding how housing prices respond to spatial accessibility, structural attributes, and typological distinctions is central to contemporary urban research and policy. In cities marked by affordability stress and market segmentation,…
This paper investigates whether spatial proximity shapes psychological-pricing choices on Austria's C2C marketplace willhaben. Two web-scraped snapshots of 826 Woom Bike listings - a standardised product sold on the platform reveal that…
We use standard physics techniques to model trading and price formation in a market under the assumption that order arrival and cancellations are Poisson random processes. This model makes testable predictions for the most basic properties…
This study simulates the evolution of artificial economies in order to understand the tax relevance of administrative boundaries in the quality of life of its citizens. The modeling involves the construction of a computational algorithm,…
When online sellers use AI learning algorithms to automatically compete on e-commerce platforms, there is concern that they will learn to coordinate on higher than competitive prices. However, this concern was primarily raised in…
We present a simple model based on a reaction-diffusion equation to explain pattern formation in a multicellular bacterium (Streptomyces). We assume competition for resources as the basic mechanism that leads to pattern formation; in…
We consider an economic geography model with two inter-regional proximity structures: one governing goods trade and the other governing production externalities across regions. We investigate how the introduction of the latter affects the…
We develop a theory of securities price formation and dynamics based on quantum approach and without presuming any similarities with quantum mechanics. Disorder introduced by trading environment leads to probability distribution of returns…
In the Learning to Price setting, a seller posts prices over time with the goal of maximizing revenue while learning the buyer's valuation. This problem is very well understood when values are stationary (fixed or iid). Here we study the…
Markets have internal dynamics leading to excess volatility and other phenomena that are difficult to explain using rational expectations models. This paper studies these using a nonequilibrium price formation rule, developed in the context…
How do cost shocks pass through to prices in markets with price dispersion? We decompose the problem into two layers. In the competition layer, consumers' consideration sets determine equilibrium distributions of normalized margins. In the…
Analyses of urban scaling laws assume that observations in different cities are independent of the existence of nearby cities. Here we introduce generative models and data-analysis methods that overcome this limitation by modelling…
The partition of society into groups, polarization, and social networks are part of most conversations today. How do they influence price competition? We discuss Bertrand duopoly equilibria with demand subject to network effects. Contrary…