Market diffusion for upgrade products on the base of CAS theory

Qiuping Wang and Di Xu

International Journal of Networking and Virtual Organisations, 2011, vol. 9, issue 3, 283-299

Abstract: Constantly launching upgrade products is a common strategy to maintain or expand market share for innovation products with network externalities. Base on the CAS theory, we regarded a market diffusion network for original products and upgrade products as a complex adaptive system and developed a CAS model to describe the interactions between three kinds of consume clusters in order to explain the market diffusion mechanism of upgrade products. The simulation results show that the initial acceptance lever for original products plays a great role in upgrade products' successful launching in the market and their substitute to original products; distribution structure of adoption of original products influences the market share of upgrade products; and multi-product monopolists should consider the market share of original products, acceptance level for original products and upgrade products synthetically when they plan to launch upgrade products.

Keywords: product upgrades; CAS theory; complex adaptive systems; market diffusion; simulation. (search for similar items in EconPapers)
Date: 2011
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