Agent-based Model for Analysis of Standardization Problems

Abstract

The primary purpose of this paper is to propose a new framework for supporting market design, and to analyze standardization problems. The main features of the framework are as follows: 1) economic units such as firms or consumers are regarded as autonomous agents, 2) essential interactions among these agents in a market are considered, 3) consumers' preferences and firms' technologies coevolute in choices of products. We call this CAMCaT (Coevolutionary Agent-based Model for Consumers and Technologies) framework. The main target problems of this paper are standardization in market design. In recent years, a technological progress and a globalization have been intensifying competitions between standards in many markets. In these competitions, firms tend to pursuit short-term profits acquisition, and winners can get more profits than losers. Moreover a firm strains on its own standard in the competitions. As a result, many stakeholders suffer various types of inconvenience from these competitions based on a market mechanism. Therefore some problems about the standardization are noticed in many markets. It is a difficult problem how we should specify a standard. Then we would like to provide a new approach unlike conventional studies of a market structure and market dynamics. This paper builds an agent-based model using CAMCaT framework to examine some essential problems about the standardization and conducts a simulation on some scenarios that show some propositions of the standardization to verify the effectiveness and validity of the model. The result shows that this model has a high potential to support market design process.