Linking consumer opinions with reservation prices in an agent-based model of innovation diffusion

Anna Kowalska-Pyzalska, Karolina Cwik, Arkadiusz Jędrzejewski and Katarzyna Sznajd-Weron

No HSC/16/03, HSC Research Reports from Hugo Steinhaus Center, Wroclaw University of Science and Technology

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.

Keywords: Word-of-mouth; Innovation diffusion; Agent-based model (search for similar items in EconPapers)
JEL-codes: C63 O33 Q55 (search for similar items in EconPapers)
Pages: 14 pages
Date: 2016-03-10
New Economics Papers: this item is included in nep-cmp, nep-hme, nep-ino and nep-mkt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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