Muhamad Ayman Kassar

Simulation models for economics

Project work on

"Mall market."


The applet requires Java 1.4.1 or higher. It will not run on Windows 95 or Mac OS 8 or 9. Mac users must have OS X 10.2.6 or higher and use a browser that supports Java 1.4. (Safari works, IE does not. Mac OS X comes with Safari. Open Safari and set it as your default web browser under Safari/Preferences/General.) On other operating systems, you may obtain the latest Java plugin from Sun's Java site.

see also Bazar market

powered by NetLogo

view/download model file: mall_market.nlogo


This is a model illustrating the mechanism of exchange in the standard market (Mall Market) which is tipycal in European countries.
We created two agent sets (buyer and seller) interacting to perform a transaction.
The determinant factor in setting a deal is the good's price. Sellers try to discover buyer's reservation price and change their offered price in its direction to achieve the maximum profit in their market, so at the end of each period they calculate the percentage of ( number of buyers who visited sellers and actually bought from them / number of buyers who visited sellers ) if it is high enough (we set the threshold) they increase their offered price benefiting from the big demand and viceversa.
Buyers are seeking the convenient price for their deal, a price which is less than their reservation price.


Buyers (colored in yellow) move arround in the model and meet sellers (colored in blue) which are fixed sitted on desks (colored with orange) and compare their reservation price with sellers offered price, they perform the deal if:
buyer-reservation-price > seller-offered-price.
after performing the deal buyer's color change to green and they keep looking for other sellers offered prices to perform another deals.
After each period (which counts 1000 tick) sellers will modifie their offered price in a certain percentage 30% until it becomes close to buyer's reservation price, then the offered price remain almost fixed.


The user can setup the agents creating a new market, then via the button go he can ask the buyers to start moving in the market and meet sellers seeking for convenient deals. He can change the number of buyers and sellers in the market using the slides set for this purpose on the down-left side and he can change buyers reservation price and sellers offered price using the slides on the upper-left side.


You can notice in the plot that the mean of deal price is changing at the end of each period until it is close enough to buyer's reservation price as sellers are discovering buyer's reservation price and change their offered price to be close to it.


Try to change buyer's reservation price and make it close to seller's offered price, you will not see any bounces in the plot because sellers cannot raise their offered price any more upon discovering that buyer's reservation price is almost the same.


You can add a memory factor to the buyers and make them buy after a certain ticks or after having visited a certain number of sellers, so they can compare the prices offered and buy the best of them.