The slides has been presented by Omid Roozmand about agent based modeling of consumer behavior

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

2. Introduction
Agent-Based Modeling
Pictures: (Gilbert 2009)
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

3. Introduction
Consumer Behavior
Why do people need luxury products?
Agent-Based Modeling and Simulation of Consumer Behavior Omid Roozmand Environmental Studies, Dartmouth College

4. Introduction (Human Behavior)
Cultural
Psychological
How Do Consumers Behave?
Social
Personal
Agent-Based Modeling and Simulation of Consumer Behavior Omid Roozmand Environmental Studies, Dartmouth College

5. ABM of Consumer Behavior
- Culture (Power Distance, Individualism,
Masculinity, UA)
- Personality: Big Five (OCEAN)
- 6 Related Needs From Maslow, Max-
Neef
Sociological and
Psychological
Theories
Five Stages model of
Consumer Behavior
Consumer Behavior
And
Economics
Agent-Based Technology-
MASQ Meta Model
Computer Science
and
Artificial Intelligence
ABM of Consumer
Behavior
Agent-Based Modeling and Simulation of Consumer Behavior Omid Roozmand Environmental Studies, Dartmouth College

6. Agent-Based Model (MASQ Meta Model) (Ferber 2009)
Internal External
Mind
Culture
Body/Object
Space
ABM of Consumer Behavior
Individual
Collective
Agent-Based Modeling and Simulation of Consumer Behavior Omid Roozmand Environmental Studies, Dartmouth College

7. Motivation
Consumer Behavior
Do we need it all?
Agent-Based Modeling and Simulation of Consumer Behavior Omid Roozmand Environmental Studies, Dartmouth College

8. CCAD
Maximizers vs. Satisficers
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!
Agent-Based Modeling and Simulation of Consumer Behavior Omid Roozmand Environmental Studies, Dartmouth College

9. CCAD
Maximizers Algorithm
Maximizers: We applied dynamic programming to find the best bundle
푏푢푛푑푙푒푏푒푠푡 = 푎푟푔 푚푎푥
(푥1, 푥2, … , 푥푛)
푛
푖=1
푥푖푢(푖푡푚푖 )
푊ℎ푒푟푒
푖=1
푥푖푝푖 ≤ 푏푢푑푔푒푡
Agent-Based Modeling and Simulation of Consumer Behavior Omid Roozmand Environmental Studies, Dartmouth College

10. CCAD
Satisficers Algorithm
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 Utility: 푁푥 ∗ 푢 푖푡푚푥 + 푁푦 ∗ 푢 푖푡푚푦 + 푁푧 ∗ 푢(푖푡푚푧 ).
Chromosome’s cost: 푁푥 ∗ 푝푥 + 푁푦 ∗ 푝푦 + 푁푧 ∗ 푝푧
Feasible Chromosome: (퐶표푠푡 ≤ 퐵푑푔).
Agent-Based Modeling and Simulation of Consumer Behavior Omid Roozmand Environmental Studies, Dartmouth College

11. 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 = 550
Cost(Chromosome 1) = 2*50 + 1*30 + 5*100 = 630
Agent-Based Modeling and Simulation of Consumer Behavior Omid Roozmand Environmental Studies, Dartmouth College

12. CCAD
Satisficers Algorithm
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

13. CCAD- Results
Maximizers- Income influence
Products
1- Item X: Low-quality disposable items
2- Item Y: Low-quality durable items
3- Item Z: High-quality durable items
Consumer Agents
100 Maximizers agents
System
100 runs, and 6 months simulation
Agent-Based Modeling and Simulation of Consumer Behavior Omid Roozmand Environmental Studies, Dartmouth College

14. CCAD- Results
Maximizers vs. Satisficers
Agent-Based Modeling and Simulation of Consumer Behavior Omid Roozmand Environmental Studies, Dartmouth College

15. CCAD- Results
Maximizers vs. Satisficers
Satisficers purchase more than Maximizers!
Agent-Based Modeling and Simulation of Consumer Behavior Omid Roozmand Environmental Studies, Dartmouth College

16. 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

17. Future Work for Consumer behavior
Connection of GIS Simulation with our Agent-Based Platform
Agent-Based Modeling and Simulation of Consumer Behavior Omid Roozmand Environmental Studies, Dartmouth College