Ignition of New Product Diffusion in Entrepreneurship: An Agent-Based Approach

Authored by Jaehu Shim, Martin Bliemel

Date Published: 2018

DOI: 10.1515/erj-2016-0014

Sponsors: No sponsors listed

Platforms: NetLogo

Model Documentation: ODD Flow charts

Model Code URLs: Model code not found

Abstract

New product diffusion is critical to entrepreneurship. Without successful diffusion, the emergence of a new business is incomplete. Although we have several well-established models of the diffusion phenomenon, these models mainly describe the macro-level diffusion patterns after their ignition, thereby ignoring the ignition mechanism. This study conceptualizes an entrepreneur's introduction of a new product and its diffusion as a generative emergence from a complexity science perspective and employs agent-based modeling and simulation (ABMS) to explain the full ignition-diffusion process as well as ignition failures. In this study's model, the ignition process is made of individual consumers' heterogeneous thresholds and their relative levels of activities. These micro-level characteristics and behaviors influence the speed and scope of the diffusion at the macro-level. Our simulations reveal the minimum number of initial adopters required to ignite the diffusion process and show how an entrepreneur's advertising campaign may accelerate the ignition and diffusion speed. The simulations also reveal how consumers' negative word-of-mouth may reduce the diffusion scope.

Tags

Simulation models Dynamics Agent-Based Modeling and Simulation networks Word-of-mouth Innovation Diffusion patterns growth Science Protocol Ignition of new product diffusion Generative emergence Complexity science