Simulation Study On New Product Market Diffusion Based On Complex Network

With the rapid development of technology and Internet, product replacement time becomes shorter and shorter. From hardware to software, from offline to online, innovative technology led to the increasingly fierce competition in every walk of life. What’s more, the competition is significantly speeded up in the Internet era. Developing new product and accelerating the update of product are important means for enterprise to have an invincible position in the fierce market competition. Successful promotion of new product has become one of the key factors to determine the success of the enterprise. However, under what conditions the new product will win the market is still unraveled. To solve this problem, based on network effect theory and complex network theory, this paper builds a new product market diffusion model to simulate the actual market competitive dynamics by using multi-agent simulation technology.This study describes the network effects of products, establishes an utility function in consumer decision making progress and builds two multi-agent simulation models to analyze impacts of network effects, technology advantage, initial capital and price strategy on new product diffusion. One model is based on global network effects, and the other one is based on local network effects in a small world model. The study draws some beneficial conclusions. Technology advantage is a key factor on new product’s successful diffusion. A sufficient initial capital is a beneficial and necessary condition to support the success of new product promotion. It’s better for new product to enter the market as early as possible. And what deserves to be noticed is that a cheap price of new product has serious negative impacts on continuous operation and development of enterprise. Compared the results in two models, we can find that the small world model is more conductive for the introduction of new product.