Results

What happens when we change the parameters of the model?

1. Number of consumers / manufacturers.
   Product differentiation occurs more quickly and is more stable with fewer manufacturers. Changing the number of consumers has little effect on the extent of product differentiation.
   
   
2. Dimension of feature space.
   Increasing the dimension of feature space speeds up product differentiation - this is expected, since the number of degrees of freedom each manufacturer has is increased. The number of niches that a market may maintain expands. The effect of increased dimension on the extent of differentiation is hard to quantify.
   
   
3. Maximum distance that each firm samples.
   Increasing this distance dramatically speeds up product differentiation, although it has little effect on the final extent of the differentiation. Additionally, once the manufacturers have established their niches, they tend to drift back and forth much more frequently; since most of their "improvements" tend to take them out of their established stable position, they follow the market leader most of the time. Stability therefore decreases.
   
   
4. Number of market leaders.
   Changing this parameter does not change the system to any significant degree; increasing the number of market leaders may have a small stablizing effect, but it is hard to tell.
   
   
5. Tendency to follow the market leader.
   Increasing this parameter greatly inhibits product differentiation. The manufacturers drift a little towards their own niches, but are immediately pulled together by their need to imitate one another. The resulting equilibrium places the manufacturers much closer together in feature space than they would normally be.
   
   
6. Random drift.
   Increasing random drift slows down the product differentiation process but has little effect on the actual extent of differentiation.
   
   
7. Different consumer distributions.
   The more closely clumped together the consumers are, the less and slower products tend to differentiate. Changing this distribution has a more significant effect on product differentiation then changing any other parameter does. In particular, when consumers are located at extremes of feature space, products are immediately pulled towards separate extremes.
   
   

Program code

The source code and executable of the program are given in proddiff.bas and proddiff.exe respectively.