Diffusion dynamics in small-world networks with heterogeneous consumers

Abstract

Diffusions of new products and technologies through social networks can be formalized as spreading of infectious diseases. However, while epidemiological models describe infection in terms of transmissibility, we propose a diffusion model that explicitly includes consumer decision-making affected by social influences and word-of-mouth processes. In our agent-based model consumers' probability of adoption depends on the external marketing effort and on the internal influence that each consumer perceives in his/her personal networks. Maintaining a given marketing effort and assuming its effect on the probability of adoption as linear, we can study how social processes affect diffusion dynamics and how the speed of the diffusion depends on the network structure and on consumer heterogeneity. First, we show that the speed of diffusion changes with the degree of randomness in the network. In markets with high social influence and in which consumers have a sufficiently large local network, the speed is low in regular networks, it increases in small-world networks and, contrarily to what epidemic models suggest, it becomes very low again in random networks. Second, we show that heterogeneity helps the diffusion. Ceteris paribus and varying the degree of heterogeneity in the population of agents simulation results show that the Springer 186 S. A. Delre, W. Jager et al. more heterogeneous the population, the faster the speed of the diffusion. These results can contribute to the development of marketing strategies for the launch and the dissemination of new products and technologies, especially in turbulent and fashionable markets.

Rethinking the Concept of Just Noticeable Difference in Online Marketing

“…The ABM has been extensively used for modelling of diffusion processes in social networks (Rand & Rust, 2011). For instance, Delre, Jager, & Janssen (2007) and Peres (2014) studied diffusion dynamics of new products according to different social network topologies. Watts & Dodds (2007) studied impact of influentials in diffusion.…”

Agent-Based Modelling, a New Kind of Research

“…But there are signs of increasing interest (e.g. Delre et al, 2007;Watts & Dodds, 2007;Delre et al, 2010;Rand & Rust, 2011). The skills to build computational models are rare among faculty and students, and few are familiar with ABM and associated theories about interdependent, complex systems.…”

Estratégias de preço na difusão de inovação: simulação baseada em agentes aplicado ao mercado brasileiro de carros elétricos

“…Sobre a externalidade global, o consumidor considera o sistema social inteiro quando avalia a utilidade de um produto em termos de números de adotantes, enquanto sobre externalidade local, o consumidor considera a adoção em relação à sua rede social mais próxima. Pesquisas estão gradualmente considerando externalidades globais em externalidades locais (BINKEN; STREMERSCH, 2009;DELRE;JANSSEN, 2007).…”

“…Apesar de muitos pesquisadores mirarem na identificação de quais são as estraté-gias de lançamento mais eficientes (ALI; KRAPFEL; LABAHN, 1995;DELRE;JANSSEN, 2007;YOUNG, 2006;KOSSINETS;WATTS, 2006),a relação entre estraté-gias de lançamento e a performance de novos produtos ainda não são conclusivamente compreendidas.…”

“…De acordo com a literatura presente(NORTH; MACAL, 2007;KIESLING et al, 2012), recomenda-se empregar N = 2000 agentes nas investigações de difusão ,sendo este valor suficiente para replicar modelos de difusão e percolação social em diferentes formatos de rede quando não há dados empíricos (DELRE;JANSSEN, 2007).…”