the model can be used to describe the product diffusion in an Advance Selling Strategy. this model takes into account the consumers product adoption, and describe consumer’s online behavior based on four states.
Objective is to simulate policy interventions in an integrated demand-supply model. The underlying demand function links both sides. Diffusion proceeds if interactions distribute awareness (Epidemic effect) and rivalry reduces the market price (Probit effect). Endogeneity is given due to the fact that consumer awareness as well as their willingness-to-pay drives supply-side rivalry. Firm´s entry and exit decisions as well as quantity and price settings are driven by Cournot competition.
The objective of this study is to create a framework to simulate and analyze the effect of multiple business scenarios on the adoption behavior of a group of technology products.