An agent based multi-optional model for the diffusion of innovations

TL;DR

This paper introduces an agent-based model extending the Potts model to simulate the diffusion of multiple competing products in a market, analyzing strategies and social influences on adoption patterns.

Contribution

It presents a novel multi-optional agent-based model for product diffusion based on the generalized Ising model, exploring strategic launching and social network effects.

Findings

Market shares depend on social network topology and uncertainty.

Delaying product launch can influence market dominance.

Simulations reveal the impact of social influence on adoption dynamics.

Abstract

We propose a model for the diffusion of several products competing in a common market based on the generalization of the Ising model of statiscal mechanics (Potts model). Using an agent based implementation, we analyze two problems: (i) a three options case, i.e. to adopt a product A, a product B, or non-adoption and (ii) a four options case, i.e. the adoption of product A, product B, both, or none. In the first case we analyze a launching strategy for one of the two products, which delays its launching with the objective of competing with improvements. Market shares reached by each product are then estimated at market saturation. Finally, simulations are carried out with varying degrees of social network topology, uncertainty, and population homogeneity.