Template-type: ReDIF-Paper 1.0
Author-Name: Babutsidze, Zakaria
Author-Email: babutsidze@merit.unu.edu
Author-Workplace-Name: UNU-MERIT
Author-Name: Cowan, Robin
Author-Email: cowan@merit.unimaas.nl
Author-Workplace-Name: UNU-MERIT, Maastricht University, BETA, University of Strasbourg
Title: Habit Formation, Information Exchange and the Social Geography of Demand
Abstract: 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 chemistry and biology. We demonstrate the validity 
	 of these results for the general case numerically. It is shown that 
	 clustering in demand is a solution to the complex system we are 
	 analyzing, and that clustering pattern can be short-term or long-lasting 
	 depending on the characteristics of the society.  
Classification-JEL: C65, D11, D83  
Keywords: demand, clustering, information, partial differential equations
Series: UNU-MERIT Working Papers
Creation-Date: 2008
Number: 2008-047
File-URL: https://unu-merit.nl/publications/wppdf/2008/wp2008-047.pdf
File-Format: application/pdf
File-Size: 275 Kb
Handle: RePEc:unm:unumer:2008047