A Study of Consumer Behavior by use of Competitive Business Games

Abstract

The behavior of consumers, labor, investors, and community members in a simulated society has been studied by use of competitive business games. The model for the simulation represents a closed economic system with firms in an oligopolistic industry operating by a set of anticipatory decision rules and a number of household communities whose decisions are made by players who identify themselves with the welfare of their communities. The product price and product sales each period are determined by equating the aggregate supply function of the firms and the aggregate demand function of the household communities. The wage rates and employment each period are determined by matching offers of the firms with offers of the household communities. The game results show that some regulations were required in order to maintain a satisfactory consumption level. Regulations included wage control, taxation of firms and households, dividend policy and assistance for destitute household communities. It was found that change in employment was related to anticipated change in wage rate and to household's monetary assets, and that change in product demand was related to anticipated change in product price and to past consumption.