Optimal price and advertising policy for new products

Knowledge Diffusion and Knowledge Transfer: Two Sides of the Medal

“…The famous so-called two compartment model, proposed by Tanny and Derzko (1988) goes in line with the model of Schmalen (1982), but their definition of innovators and imitators seems not to be clear-cut: innovators adopt because of learning effects driven by external information, whereas imitators adopt because of external knowledge by prior adopters. This model hypothesises that innovators adopt because of search information, while imitators adopt due to experience but also due to knowledge transfer which can be justified with the existence of networks.…”

“…Although Schmalen (1982) has mentioned that innovators' and imitators' behaviour regarding their adoption decision differs, he does not capture this fact in a notational form. The famous so-called two compartment model, proposed by Tanny and Derzko (1988) goes in line with the model of Schmalen (1982), but their definition of innovators and imitators seems not to be clear-cut: innovators adopt because of learning effects driven by external information, whereas imitators adopt because of external knowledge by prior adopters.…”