Innovation diffusion of repeat purchase products in a competitive market: An agent-based simulation approach

Stummer, Christian; Kiesling, Elmar; Günther, Markus; Vetschera, Rudolf

doi:10.1016/j.ejor.2015.03.008

Cited by 104 publications

(80 citation statements)

References 17 publications

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“…ABM has been already used when modelling innovation diffusion of repeat purchase products in competitive markets [6]. However, ABM modellers usually end up using decision-making algorithms that resemble the functions used in neoclassical models [1], [6].…”

Section: Introductionmentioning

confidence: 99%

“…However, ABM modellers usually end up using decision-making algorithms that resemble the functions used in neoclassical models [1], [6]. Nevertheless, ABM can overcome many limitations of traditional approaches by accounting for heterogeneity in consumer preferences as well as in the social structure of their interactions and allows for modelling consumers as Boundedly Rational Agents (BRA) who make decisions under uncertainty and are influenced by micro-level drivers of adoption [6].…”

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

Socio-technical energy transitions: Modelling innovation diffusion through markets with heterogeneous boundedly rational agents

Pinanez

Blanco-Bogado

2016

2016 IEEE Biennial Congress of Argentina (ARGENCON)

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In recent years, thanks to new computational techniques like Agent-Based Models (ABM), modelling tools for socio-technical transitions to sustainable energy use have become more sophisticated than top-down techno-economic energy models (TEEMs) that are normally used to inform policy worldwide. TEEMs tend to ignore complex market structures, socio-political agents and dynamics, or coevolutionary features of society and technology that are important for understanding how actors adopt new technologies during socio-technical energy transitions (STETs). However, even thought that several aspects of energy transitions like diffusion, demand, and techno-economicdrivenness are already incorporated in ABM of STETs, in our view, these existing models need to include robust and tested market simulation and decision making algorithms for modelling economic interactions among agents that are boundedly rational and heterogeneous. Thus, our aim is to present an ABM framework, merging two application programming interfaces (API), which can leverage the modelling of STETs by allowing computational agents embedded in social networks and dynamic market structures while adoption of new technologies occur. These APIs are: LARA (Lightweight Architecture for Boundedly Rational Agents) and JASA (Java Auction Simulator API). In our view, this integration can allow the robust and novel simulation of innovation diffusion embedded in markets. In order to demonstrate the feasibility of this approach, we present a simple example in which agents decide whether to adopt electrical mobility or not. In doing so, we embed the agents inside a market structure to allow their interaction with firms selling conventional and electrical cars. Among other results, the model output shows a typical s-shape curve diffusion pattern like the ones produced in Bass-Models. Directions for further research are discussed.

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Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Socio-technical energy transitions: Modelling innovation diffusion through markets with heterogeneous boundedly rational agents

Pinanez

Blanco-Bogado

2016

2016 IEEE Biennial Congress of Argentina (ARGENCON)

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“…Since heterogeneity of individual customers cannot be accounted for when describing information diffusion on overall population level ABMs have emerged which enable customer interaction on individual level, i.e. sending and receiving of information to replicate word-of-mouth activities [22]. This consequently leads to the discussion regarding content and timing of information exchange on individual level and furthermore how agents are affected by obtaining new information.…”

Section: Background and Related Workmentioning

confidence: 99%

“…On implementation level customer agent adaptation has been considered by defining parameters which quantify the degree to which extend information contents are adapted [12]. Here, features have been used to account for decay of information impact over time [22]. This allows for customer agents to return their original, i.e.…”

Section: Background and Related Workmentioning

confidence: 99%

Towards Circular Economy implementation: an agent-based simulation approach for business model changes

Lieder

Asif

Rashid

2017

Auton Agent Multi-Agent Syst

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This paper introduces an agent-based approach to study customer behavior in terms of their acceptance of new business models in Circular Economy (CE) context. In a CE customers are perceived as integral part of the business and therefore customer acceptance of new business models becomes crucial as it determines the successful implementation of CE. However, tools or methods are missing to capture customer behavior to assess how customers will react if an organization introduces a new business model such as leasing or functional sales. The purpose of this research is to bring forward a quantitative analysis tool for identifying proper marketing and pricing strategies to obtain best fit demand behavior for the chosen new business model. This tool will support decision makers in determining the impact of introducing new (circular) business models. The model has been developed using an agent-based modeling approach which delivers results based on socio-demographic factors of a population and customers' relative preferences of product attributes price, environmental friendliness and service-orientation. The implementation of the model has been tested using the practical business example of a washing machine. This research presents the first agent-based tool that can assess customer behavior and determine whether introduction of new business models will be accepted or not and how customer acceptance can be influenced to accelerate CE implementation. The tool integrates socio-demographic factors, product utility functions, social network structures and inter-agent communication in order to comprehensively describe behavior on individual customer level. In addition to the tool Electronic supplementary material The online version of this article (doi:10.1007/s10458-017-9365-9) contains supplementary material, which is available to authorized users. itself the results of this research indicates the need for systematic marketing strategies which emphasize CE value propositions in order to accelerate customer acceptance and shorten the transition time from linear to circular. Agent-based models are emphasized as highly capable to fill the gap between diffusion-based penetration of information and resulting behavior in the form of purchase decisions.

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“…Stummer and Kiesling 2012), the required data for parameterizing the market simulation has to be collected (e.g., by means of conjoint analysis for retrieving proper preference data as discussed in Sect. 3 and suggested by Garcia et al 2007), and simulation results have to be validated in order to ensure that they also reflect and explain processes from real markets (an example can be found in Stummer et al 2015; for a more general discussion cf. Fagiolo et al 2007).…”

Section: Market Analysismentioning

confidence: 99%

Management science in the era of smart consumer products: challenges and research perspectives

Dawid

Decker

Hermann

et al. 2016

Cent Eur J Oper Res

Self Cite

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Smart products not only provide novel functionalities, but also may establish new business models, markets, or distribution channels, strengthen relationships with consumers, and/or add smart remote services. While many technical obstacles of such products have already been overcome, the broad market dissemination of smart products still poses some vital managerial challenges for decision makers. In this paper, we outline the technical potential and future trends of smart consumer products, discuss economic challenges in four scopes, namely, preference-based new product development, market analysis, supply chain design, and industry development, and, in particular, we highlight research perspectives for management science in this promising field.

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Innovation diffusion of repeat purchase products in a competitive market: An agent-based simulation approach

Cited by 104 publications

References 17 publications

Socio-technical energy transitions: Modelling innovation diffusion through markets with heterogeneous boundedly rational agents

Socio-technical energy transitions: Modelling innovation diffusion through markets with heterogeneous boundedly rational agents

Towards Circular Economy implementation: an agent-based simulation approach for business model changes

Management science in the era of smart consumer products: challenges and research perspectives

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