Dynamics of Price Sensitivity and Market Structure in an Evolutionary Matching Model

The relationship between equilibrium convergence to a uniform quality distribution and price is investigated in the Q-model, a self-organizing, evolutionary computational matching model of a fixed-price post-secondary higher education created by Ortmann and Slobodyan (2006). The Q-model is replicated with price equaling 100% its Ortmann and Slobodyan (2006) value, Varying the fixed price between 0% and 200% reveals thresholds at which the Q-model reaches different market clustering configurations. Results indicate structural market robustness to prices less than 100% and high sensitivity to prices greater than 100%.