From consumer decision to market share - Unanimity of majority?

Abstract

We use a general cellular automata model to study the consumer decision-making process. Within this general model we use three different rules governing word-of-mouth communication (w-o-m), one majority rule and two unanimity rules, and ask the question if differences between these three w-o-m rules, introduced on the microscopic level, will manifest on the macroscopic level. We show that in the model with the majority rule the neighborhood plays a significant role in terms of the market shares whereas movement (interpreted as seeking for information in other sources) is almost negligible. Exactly the opposite phenomena are observed for models in which unanimity, instead of majority, is needed to convince agents. We also introduce a modification of the unanimity rule, based on the Latane theory of the social influence, and show that on the macroscopic level this modification is indistinguishable from the simple unanimity rule. We conclude the paper with a recommendation which rules are more appropriate to model particular marketing phenomena.