Diffusion of New Products with Heterogeneous Consumers

DOI10.1287/MOOR.2022.1261MaRDI QIDQ6199241zbMATH OpenOpenAlexFDO

Authors Gadi Fibich, Amit Golan

Publication date 23 February 2024

Published in Mathematics of Operations Research (Search for Journal in Brave)

Full work available at URL https://arxiv.org/abs/2102.05926

zbMATH Keywords

agent-based modelanalysesBass modeldiffusion in networksdiscrete modelsheterogeneitymarketingstochastic models

Mathematics Subject Classification ID

Consumer behavior, demand theory (91B42) Stochastic models in economics (91B70)

Abstract: Does a new product spread faster among heterogeneous or homogeneous consumers? We analyze this question using the stochastic discrete Bass model, in which consumers may differ in their individual external influence rates $p_j$ and in their individual internal influence rates $q_j$. When the network is complete and the heterogeneity is only manifested in $p_j$ or only in $q_j$, it always slows down the diffusion, compared to the corresponding homogeneous network. When, however, consumers are heterogeneous in both $p_j$ and $q_j$, heterogeneity slows down the diffusion in some cases, but accelerates it in others. Moreover, the dominance between the heterogeneous and homogeneous adoption levels is global in time in some cases, but changes with time in others. Perhaps surprisingly, global dominance between two networks is not always preserved under "additive transformations", such as adding an identical node to both networks. When the network is not complete, the effect of heterogeneity depends also on its spatial distribution within the network.

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Cited in

(4)

• The bass diffusion model: agent-based implementation on arbitrary networks
• Monotone convergence of spreading processes on networks
• Funnel theorems for spreading on networks
• Pricing and operations planning for new product launch: introducing adopters' variant willingness to pay

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