Linking Consumer Opinions with Reservation Prices in an Agent-Based Model of Innovation Diffusion

Authored by A Jedrzejewski, A Kowalska-Pyzalska, K Sznajd-Weron, K Cwik

Date Published: 2016

DOI: 10.12693/aphyspola.129.1055

Sponsors: Polish National Science Center

Platforms: No platforms listed

Model Documentation: Other Narrative Flow charts Mathematical description

Model Code URLs: Model code not found

Abstract

We extend a recently developed agent-based model of innovation diffusion by linking the opinions of potential consumers with their market behavior via the concept of reservation prices. Through a dynamic mechanism that takes into account social influence, the agents in our model can both increase or decrease their product appraisal. Considering complete graph network structures and using mean-field treatment we find that the model can exhibit a plethora of scenarios, observed empirically but not attainable within the classical Bass model. We also show the existence of a critical market price above which the innovation cannot diffuse.

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