Product Diffusion Using Advance Selling Strategies: An Online Social Network Perspective

Peng Shao () and Ping Hu ()
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Ping Hu: http://som.xjtu.edu.cn/contents/1505/21351.html

Journal of Artificial Societies and Social Simulation, 2017, vol. 20, issue 2, 2

Abstract: This study analyzes the diffusion of two product types using an advance selling strategy from a social network perspective. We extended the susceptible-infected-removed (SIR) model by adding a buyer component (SIRB) to the model and conducted an in-depth analysis of transmission probability and purchase probability when using an advance selling strategy. Agent-based simulation indicates that cost reduction and promotional effort have positive effects on profits, while lead time negatively affects them. Statistical analyses indicate that lead time has a U-shaped relationship with profits for non-durable products, but an inverted U-shaped relationship with those for durable products. For both products types, promotional effort has an inverted U-shaped relationship with profits under the condition of low-quality products and an inverted U-shaped relationship in the case of high-quality products. The reasons underlying these results are discussed, followed by implications for firms adopting advance selling strategies.

Keywords: Advance Selling; Product Diffusion; Social Network; Complex Network (search for similar items in EconPapers)
Date: 2017-03-31
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Persistent link: https://EconPapers.repec.org/RePEc:jas:jasssj:2016-32-2

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