pub tables lezlove natasha bedingfeild megyn price rehnquist funeral bratzpack giuliana depandi tamela jones scarymovie bridget marquardt estratest kelly rippa lovesac fredricks of hollywood navy knowledge online nko gaithernet swiffer coupon smaq jennifer lothrop all rosario tijeras water aerobics ashleesimpson jennaire stromboli recipes herschners lipator philidelphia cream cheese 93q country tia texada mikehunt pfchangs sammyboy jamican music strawberry daiquiri recipe relators in dallas coldwell banker gundaker scarlet johanson panteon rococo bettie ballhaus pomona fairplex corey sevier gumaxxx charmaine sinclaire wheaton terriers goregallery feathers wips mansfield isd hedley lyrics charmainesinclair heeleys bettie ballhaus sexy quotes pickin wildflowers rocktoons littlestpetshop sgboy phoniex promisary note ceebeebies foxtail palm chrysler me412 baton twirling costumes aquatapes naurto carne guisada kangna kwik kerb dilworthtown inn lilscrappy pety pablo cushman truckster zipfizz nitto 1320 cheats pigion forge telescoping flag pole pumpit tinnerman torani syrup marie czenko kuechel angie aparo data recovery programs amfa local 33 inuyasha amv enterprize rent a car free proxify bottleless water cooler carsense jarell houston elwebbs bbs kerissa fare heinekin satyriasis torsemide murano grande at portofino kenny chensey ferryhalim martz trailways dashunds acerbis plastics mission santa clara de asis libertyville saddle shop scott strapp homedatabase swapmeets xzbit dcecu cindy trimm geauga county auditor damian marley road to zion tiny plaid ninjas jess margera erowids pusstcat dolls pistol pete maravich straight shota 103.7 houston celebrity bulges toilet spy cam manolo blanik pdp 4350hd truett mcconnell college trailerable houseboat exanet lifecare chiropractic jill halfpenny jeffrey pelley darma and greg girltime annashorses unibomber orangecountychoppers zrx1200r illume candles turbinado sugar bunny ranch navada piccaso facesitters hiram abiff opgi playdad terriors gravitation doujinshi pcgen weimeraner puppies glock 18c equine strangles rosanna tavarez selfsucker the kooks nieve honda cb650 spyglasses seedless vascular plants hustlers musik crocs metro avenged sevenfold trashed and scattered giga bowser lovehearts folkstyle wrestling josh duhamel nude bullshark barrington school district 220 pinger.exe manicans yuken fayette county detention center tripping the rift porn styleproject corrida critter elva hsiao justine bateman nude envelope stuffer playboy bunnie chris tomlin indescribable corrine clery parkdean holidays stylecraft furniture mariska hagarty britax companion caldrea cleaning products latitia motorcycle chroming napolian dynamite waytek kitsap humane society agedlovers natasha gubin gizzard shad halloween crossdress preemie clothes california bealtes natalie portman rap video full metal alchamist yabbies filipina bold stars mirei kuroda pantry moths nfl playbooks servsafe certification buffie the bodie vfwwdm.drv loliangels scancat coleslaw wrestling jemco boysboys adrienne curry naked saigo takamori hometown honeys shekira carmella danielle decesare darth bane dhcpcsvc.dll karrine stephans juggies pics bioms deirdre imus jenson ackles tiffani thiessen smoking luara jed madela susan glaspell clarence carter strokin freestyle kingz amoeba proteus mugho pine caller id spoof pekkle playboy bunnie nancy drew the final scene walkthrough spoodle alligator coloring pages sexymendirectory gsdca limmer boots juliet lmnt elaine freakmommas surfboys de oppresso liber symtecMEQU (Market Effects of Quality Uncertainty)

MEQU (Market Effects of Quality Uncertainty)

This applet requires Java 1.4.1 or higher. You may obtain the latest Java plugin from Sun's Java site..

created with NetLogo
view/download model file: MEQU.nlogo


MEQU (Market Effects of Quality Uncertainty) is a model designed to study the effects of quality uncertainty and incomplete information on market dynamics. The main assumption in this model is that buyers form quality expectations about products based on their own past experiences and on the experiences of people they know.

This model is based on buyers' expected behaviour, in contrast with classical models of quality uncertainty, which, in addition to quality variability, tend to assume asymmetric information and are based on the phenomenon of adverse selection. MEQU shows that asymmetric information is not necessary for quality variability to damage (or even destroy) a market. It also shows how sharing information, or making aggregate information available, can mitigate the damaging effects of quality variability.


  1. Set up the model by selecting values for the following parameters:
  2. Press the setup button.
    The social network (buyers and links) will be represented on the screen. If the show-network-formation switch is on you will see the dynamics of the network formation.
  3. Press go-once to see the results after just one trading session, or press go to start a series of trading sessions. Press go again to halt the model.


Social network

Buyers can be connected, forming a social network. Thus, each buyer may link to none, one, or several buyers; this (potentially empty) set of neighbours defines the buyer's social neighbourhood.

If the network-structure is random, then it is created by establishing a certain number (num-links) of directed links between randomly selected pairs of buyers.

If the network-structure is preferential attachment, buyers are sequentially added to the network; every buyer who joins the network selects pref-attachment-links other buyers to link to, who are selected with probability proportional to their number of existing (incoming and outgoing) links. At the beginning of the creation of this network, while the number of buyers is less than pref-attachment-links, each new buyer links to all existing buyers. This is Barabási and Albert's preferential attachment model of network growth (See Newman 2003, sec. VII-B).

If the network-structure is double ring, all buyers are randomly placed in a ring (randomly "seated" at a round table) and each buyer links to the one on her right and to the one on her left.

If the network-structure is star, one buyer is randomly selected and bidirectional links between her and each one of all the other buyers are created.


The supply function is constant. There are num-sellers sellers indexed in i (i = 1,..., num-sellers) with minimum selling price for seller i being mspi = i. A seller i is willing to sell her product if price p >= mspi. This creates a supply function such that the number of items offered at price p (p >= 0) is the integer part of p (with the additional restriction that the number of items offered must always be less than, or equal to, num-sellers).


The demand function in every session is formed by summing up buyers' individual reservation prices. The reservation price of buyer i in session n is equal to her initial reservation price multiplied by her current expected quality (qexpi,n) for the product. At any trading session n, the num-buyers individual reservation prices can be sorted out as follows:

R1,n >= R2,n >= … >= Rnum-buyers,n

This order will be useful to determine the price (see below). Finally, note that, given the description above, the initial demand is such that at price p (p <= num-buyers), the number of products demanded is the integer part of [num-buyers + 1 - p] (with the additional restriction that it always must be less than, or equal to, num-buyers).

Market mechanism

Buyers and sellers trade in sessions. In each session, each buyer can buy at most one product, and each seller can sell at most one product. In each session n, the market is centrally cleared at the crossing point of supply and demand. Specifically, the number of traded units y in session n is the maximum value i such that Ri,n >= mspi and the market price pn is taken to be

pn = ½ [Min (Ry,n, mspy+1) + Max (Ry+1,n, mspy)]

This price-setting formula takes into account the satisfied supply and demand ( mspy <= pn <= Ry,n ) and the pressure of the extramarginal supply and demand ( mspy+1 >= pn >= Ry+1,n ).

Quality expectations

In general, buyers form their quality expectations considering both their own experience and their social neighbours' experience. More precisely, after every trading session, every buyer i updates her quality expectation if and only if
In either of those cases, buyer i updates her expectations according to the following rules:


Setting the parameters

Starting up the model

  1. Click on setup. This creates the buyers, the sellers, the social network (buyers and links), and displays the initial demand and supply.
  2. To make the model run once (i.e. one trading session) press go-once. To run the model indefinitely, press go. Press go again to halt the model.

Interacting with the model at runtime

There are a number of ways in which the user can interact with the model. Except for the number of sellers and buyers, the value of every parameter described above can be changed at runtime. Thus, except for potentially those two parameters, the model is always using the values that are shown in the interface. Note that, in particular, the user can create and delete random links in the network as the model runs. This can be conducted by modifying the number of links directly. All links are created or deleted at random. There are also other ways, all of them related to the social network, in which the user can interact with the model at runtime:



Create a market without social network (num-links = 0). Use some quality variability and individual-weight which are not very low and observe the market failure.

Select a social-weight greater than 0, increase the number of links in the network and observe the recovered dynamics. The market failure is also visible if there is a social network but the social-weight is set to 0.


MEQU was developed by Segismundo S. Izquierdo and Luis R. Izquierdo. The authors would like to gratefully acknowledge financial support from the Scottish Executive Environment and Rural Affairs Department and from the SocSimNet project 2004-LV/04/B/F/PP.


Akerlof GA (1970). The Market for Lemons: Quality Uncertainty and the Market Mechanism. The Quarterly Journal of Economics 84: 488-500

Hendel I and Lizzeri A (1999). Adverse selection in Durable Goods Markets. American Economic Review 89 (5): 1097-1115

Izquierdo SS, Izquierdo LR (2006). The Impact of Quality Uncertainty without Asymmetric Information. Agent Based Models of Market Dynamics and Consumer Behaviour, Pre-proceedings.

Izquierdo SS, Izquierdo LR, Galan JM and Hernandez C (2005). Market Failure caused by Quality Uncertainty. Artificial Economics - Lecture Notes in Economics and Mathematical Systems 564. Springer-Verlag, Berlin, 2005.

Macho-Stadler I and Pérez-Castrillo JD (2001). An Introduction to the Economics of Information. Incentives and Contracts. Oxford University Press (Second edition)

Newman M.E.J. (2003). The structure and function of complex networks. SIAM Review 45, 167-256 .

Rose C (1993). Equilibrium and Adverse Selection. The RAND Journal of Economics, 24 (4): 559-569

Stigler GJ (1961). The Economics of Information. Journal of Political Economy 69: 213-225

Stiglitz JE (2000) The Contributions of the Economics of Information to Twentieth Century Economics. The Quarterly Journal of Economics, Vol. 115, Issue 4 - pp. 1441 - 1478

Vriend N (2000). An Illustration of the Essential Difference Between Individual and Social Learning, and its Consequence for Computational Analyses. Journal of Economic Dynamics and Control 24: 1-19

Wilensky U (1999) NetLogo. Center for Connected Learning and Computer-Based Modeling, Northwestern University, Evanston, IL.

Wilson CA (1979). Equilibrium and adverse selection. American Economic Review 69: 313-317

Wilson CA (1980). The Nature of Equilibrium in Markets with Adverse Selection. Bell Journal of Economics 11: 108-130

casino gambling game com online addiction gambling help online honest online casino charlestown casino and slots casino legal online casino en language online poker sunset station casino playing card online gambling and sports bet casino playing blackjack for a living online casino for sale online free let it ride casino win online casino casino exorcist fairbiz biz online william hill online gambling casino diet online pill casino gambling game internet play site bonus casino mighty slot use online casino vacancies in customer support vegas online casino casino cd dating fairbiz biz music online online casino laws casino casino internet online top online casino reviews 25 casino july online pings trackback online casino gambling blackjack best casino game line online gambling online magazine 1 casino july online pings trackback free gambling game poker slot las vegas sports gambling online casino casino casinoalgarve jogos online online casino online wagering best ways to play blackjack best online casino games casino machine slot tip casino neteller online canadian casino online online epassporte casino best online gambling sites free gambling poker slot casino slot machine video online gambling revenues uk online casino review online casino three card poker online gambling site reviews casino black jack betting online taiwan online gambling online gambling investment gambling slot online casino business plan