Master’s student Antonio Jurlina has completed a simulation model of food buying clubs in which people share bulk purchases. Building on the work of Ethan Tremblay, Jurlina fit this model to data from 30 separate food clubs. The model simulates membership as a result of success in cooperative purchasing behavior between agents.
To simulate a club, the model takes a set of input variables: average catalog size, mean items per case, starting members, and the number of orders for a that club. It then creates a set of virtual agents who interact to share food purchases. Happy agents will help others. Unhappy agents will not help out. As a result simulated clubs have a cooperative momentum. This cooperative momentum determines whether members feel satisfied and stay in the club, or leave.
The model has two free parameters:
join_rate : the probability of additional members joining a club in a given order
prosociality : the average tendency of club members to be willing to buy something they don’t prefer to help another member
We fit the model to the data by finding the values of join_rate and prosociality that produce the closest membership trend line. These results show that our model can mimic real world clubs with good accuracy. Our next step will be to test the predictive capacity of the model by doing out of sample prediction tests.