The Impact of Information Sharing Mechanism to Geographic Market Formation

Abstract

The importance of information to any kinds of social behaviors is needless to waste any words. Different information sharing mechanisms and their functionalities to social systems are not well studied. In this paper, with agent-based model, we investigated information sharing mechanisms that leads to different patterns in the macro-level spatial market formation. We proposed three mechanisms. The first is a localized global information sharing mechanism where pheromone is used. The second is one that agents use only information out of their own memory. The third mechanism is one that agents can share information within a group of friends. Simulation results show that centralized markets are formed while agents use localized global information. The distribution of market size in this case follows a power-law distribution. When agents use individual information, no big markets can be formed. In this case, people cannot easily make a successful trade. When agents communicate, they get more information from others but increase uncertainty when communication is not sufficient.