Small world network model of personal consumption: Demand-side management in an expert system

  • Authors:
  • Steven D. Silver;Phillip Cowans

  • Affiliations:
  • Lucas Graduate School of Business, California State University, San Jose, CA, USA;Cavendish Laboratory, University of Cambridge, CB3 0HE, UK

  • Venue:
  • Expert Systems with Applications: An International Journal
  • Year:
  • 2008

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Abstract

Representing personal consumption is important to a range of expert decision makers in academic, government and corporate settings. We cite the possible contribution of studying a system model of the use of information in personal consumption when agents are members of a small world network. Information has properties in non-rival borrowing and sensitivity to network memberships that individual agents do not typically include in heuristics they use in budget allocation. We use computational methods to show how an expert system in which a super agent using a model that includes properties of information and network parameters can define welfare maximizing allocation and policy to bring the allocation of individual agents closer to a welfare-maximizing allocation. Implications of systems with the dynamics we propose for representing demand-side management in expert systems are noted.