| Abstract |
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Price wars — the iterative undercutting of prices to
the marginal cost by competitors — have frequently
emerged in models of economic systems populated by
computational agents. In this paper, we explore the
prevalence and severity of price wars in models of
multiagent ecommerce systems that include costs and
limitations on interagent communication. The empirical
results we describe in this paper indicate that, for
a stationary consumer population, limiting the rate of
penetration of price information can reduce the severity
of price wars, and that charging producer
agents for communication can in fact curtail price-undercutting
before prices (and profits) bottom out.
Furthermore, prices (and profits) do not bottom out
for non-stationary consumer populations, where in
fact cyclic price wars can arise.
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 Additional Information
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Citation:
Jianhui Wu, Edmund H. Durfee,
"The Impact of Communication Costs and Limitations on Price Wars in an Information Economy,"
aamas,
pp. 1205-1212,
Third International Joint Conference on Autonomous Agents and Multiagent Systems - Volume 3 (AAMAS'04),
2004
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