Modeling Agent-based Consumers Decision-making with 2-tuple Fuzzy Linguistic Perceptions

Abstract

Understanding consumer behaviors and how consumers react to marketing campaigns and viral word-of-mouth processes is crucial for marketers. Classical approaches try to infer this information from a global top-down perspective. However, a more suitable and natural approach is to model consumer behaviors in a heterogeneous and decentralized bottom-up approach. In this case, each virtual consumer has her own mental state and decision-making strategies to simulate her purchase decisions. The system of virtual consumers generates the global sales and a marketer can understand the rules that govern the market. A well-known paradigm to model these systems is agent-based modeling (ABM). In this manuscript we present an ABM where the brand preferences of the consumer agents are modeled using 2-tuple fuzzy linguistic variables. These variables represent the perceptions these consumers have on the different aspects or drivers every product available in the market has (e.g., price or quality). The product selection process of the agents is based on those perceptions and a utility maximization rule. This rule requires a fuzzy aggregation of the fuzzy linguistic perceptions about the products. Our proposal employs an ordered weighted average (OWA) to aggregate them. Our experiments show this approach does not suffer any loss of information when applied on data from real markets. Hence it is a suitable representation of the products preferences, normally represented by qualitative values in marketing surveys. To the best of our knowledge, this is the first work integrating a marketing ABM with fuzzy linguistic modeling.