An agent based multi-optional model for the diffusion of innovations

We propose a model for the diffusion of several products competing in a common market based on the generalization of the Ising model of statistical mechanics (Potts model). Using an agent based implementation we analyze two problems: (i) a three options case, i.e. to adopt a product A, a product B,...

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Bibliographic Details
Published in:Physica A 2014-01, Vol.394, p.254-265
Main Authors: Laciana, Carlos E., Oteiza-Aguirre, Nicolás
Format: Article
Language:English
Subjects:
Decision under uncertainty
Delay
Diffusion
Heterogeneous population
Homogeneity
Innovation diffusion
Launching
Markets
Potts model
Product competition
Social networks
Statistical mechanics
Strategy
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Summary:We propose a model for the diffusion of several products competing in a common market based on the generalization of the Ising model of statistical mechanics (Potts model). Using an agent based implementation we analyze two problems: (i) a three options case, i.e. to adopt a product A, a product B, or non-adoption and (ii) a four option case, i.e. the adoption of product A, product B, both, or none. In the first case we analyze a launching strategy for one of the two products, which delays its launching with the objective of competing with improvements. Market shares reached by each product are then estimated at market saturation. Finally, simulations are carried out with varying degrees of social network topology, uncertainty, and population homogeneity. •Formalism for the study of collective decision among several options is proposed.•Heterogeneity in the population of potential buyers produces more realistic results.•Trade-off between improvement and time of launching is analyzed.•Uncertainty reduces the delay interval in the launching with competitive advantages.•Saturation time decreases due to the increment of the rewiring probability.
ISSN:0378-4371
1873-2119
DOI:10.1016/j.physa.2013.09.046