Ignition of New Product Diffusion in Entrepreneurship: An Agent-Based Approach

Jaehu Shim, Martin Bliemel
  • Entrepreneurship Research Journal, October 2017, De Gruyter
  • DOI: 10.1515/erj-2016-0014

A simulation approach to the ignition-diffusion process of new products in entrepreneurship

What is it about?

This study explains the full ignition-diffusion process of new products, as well as ignition failures, employing agent-based modeling and simulation (ABMS). In this study, the ignition process is made of individual consumers’ heterogeneous thresholds and their relative levels of activities. These micro-level characteristics and behaviors influence the speed and scope of the diffusion at the macro-level. Our simulations reveal the minimum number of initial adopters required to ignite the diffusion process and show how an entrepreneur’s advertising campaign may accelerate the ignition and diffusion speed. The simulations also reveal how consumers’ negative word-of-mouth may reduce the diffusion scope.

Why is it important?

New product diffusion is critical to entrepreneurship. Without successful diffusion, the emergence of a new business is incomplete. Although we have several well-established models of the diffusion phenomenon, these models mainly describe the macro-level diffusion patterns after their ignition, thereby ignoring the ignition mechanism.

Perspectives

Jaehu Shim
Queensland University of Technology

This study conceptualizes an entrepreneur’s introduction of a new product and its diffusion as a generative emergence from a complexity science perspective.

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http://dx.doi.org/10.1515/erj-2016-0014

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