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Once the simulation starts, Consumers form new social relations when they meet
each other or by referral through their existing social network. The initial strength
of a social tie is proportional to the similarity between the two Consumers.
Strengths of social ties decay with time unless they are recharged by exchanges
of information. While the structure of the social network evolves endogenously,
when ever a Consumer has no social ties the simulation system intervenes and
creates several new social ties.
Products are initially distributed randomly in the Consumption Space, where
they remain until they are consumed or they expire. If they are consumed or expire,
they are replaced by the Producer(s) but not necessarily with a Product of the same
type. During simulation initialization, a relatively large number Product types are
generated by the system and these comprise the 'Product Design Set', i.e. the set of
possible new Products that may be introduced during the course of a simulation run.
A small subset of these possible Products are selected as the initial set of 'active'
Products. Each new Product type is selected from the 'adjacent possible' relative
to the currently 'active' Product set. Each new product introduced expands the
'adjacent possible' to include Products that were previously not feasible for
Producers. If the Product Design Set is large relative to the length of a simulation
run and the rate of new Product introductions, then we are able to simulate a
continuous stream of innovations.
Though Producers have several cost measures associated with each type of
Product, there is no price to Consumers and thus no financial transaction between
Consumers and Producers. This is because our research focus is on the interaction
of Consumer and Producer value systems and not on profit-maximizing decisions
given limited resources.
Producers only take action when a Product is consumed or expires. When that
happens they make a decision to either replace it with an identical Product type, a
different Product type in the portfolio of available types, or to introduce a new
Product type that had previously not been available. Producers have no direct
interaction with or knowledge of individual Consumers, therefore they make
their decisions based on historical data regarding the consumption and expiration
Products of various types. Also, in the current implementation, Producers have
no social interactions with each other, nor any knowledge that there are other
Producers. In the results presented in this paper, the simulation was configured to
have a single Producer.
The population of Consumers initially have identical values and other initial
conditions, and are spaced randomly with uniform distribution on the Consumption
Space. The adaptive elements in their cognitive architecture are primed in two
ways. During initialization Consumers repeatedly sense, perceive, and evaluate all
of the products in the initial 'active' set. Then the simulation is started in a 'priming
mode', which is fully functional except that experimental data is not collected.
Priming is complete when all or nearly all Consumers are sufficiently adapted
to make consistent valuation and consumption decisions. After priming is complete,
the Consumption Space is reset to it's initial conditions for Products and Con-
sumers, including the social network.
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