The Agent-Based Diffusion Model: Simulating Informative and Normative Effects on Consumer Networks

Abstract

A central idea in marketing and diffusion research is that influences of social networks are important in the formation of public opinion. We examine the neighbors’ effect on the decisions of consumer behavior over diffusion. We suggest an agent-based diffusion model of an online social network, which has “scale-free,” “regular,” and “small world” properties. There are different paths in which the informative effect and the normative effect convey information. The informative effect indicates the exploratory action of gaining information, whereas the normative effect indicates the imitation effect, which works on how consumers try to keep up with other consumers. The informative effect can cause a takeoff, which is defined as the critical mass and is described as the existence of a sufficient amount of adopters in a diffusion process. However, it is not sufficient to reach the complete diffusion of a product; namely, all consumers reach to adopt a product or service. It is inadequate to think that opinion leaders are connected with numerous other consumers. Rather, diffusion is promoted entirely by active communication among non-opinion leaders.