16.08.30-bass model

Bass diffusion model

wiki
A simple differential equation that describes the process of how new products get adopted in a population.

Adopters can be classified as innovators or as imitators and the speed and timing of adoption depends on their degree of innovativeness and the degree of imitation among adopters.

[Original Paper](A new product growth for model consumer durables)

$$\frac{f(t)}{1-F(t)}=p+qF(t)$$
where:
$f(t)$ is the change of the installed base fraction
$F(t)$ is the installed base fraction (安装基础分数)
$p$ is the coefficient of innovation
$q$ is the coefficient of imitation

Sales $S(t)$ is the rate of change of installed base (i.e. adoption) $f(t)$ multiplied by the ultimate market potential $m$:

$$S(t)=mf(t)$$

$$S(t)=m\frac{(p+q)^2}{p}\frac{e^{-(p+q)t}}{(1+\frac{q}{p}e^{-(p+q)t)^2}}$$

The time of peak sales $t^*$

$$t^*=\frac{\ln{q}-\ln{p}}{p+q}$$

Extensions to the model

Generalised bass model (with pricing)
Frank Bass, Trichy Krishnan and Dipak Jain

$$\frac{f(t)}{1-F(t)}=(p+qF(t))x(t)$$
where $x(t)$ is a function of percentage change in price and other variables.
Successive generations

Relationship with other s-curves

exponential distribution $q=0$
logistic distribution $p=0$
Bass model is a special case of the Gamma/shifted Gompertz distribution (G/SG): Bemmaor (1994)

use in online social networks
The Bass diffusion model is used to estimate the size and growth rate of these social networks.
Bass model provides a more optimistic picture of the future than alternative model such as the Weibull distribution and the shifted Gompertz distribution.

adoption
This model has been widely influential in marketing and management science. In 2004 it was selected as one of the ten most frequently cited papers in the 50-year history of Management Science. It was ranked number five, and the only marketing paper in the list. It was subsequently reprinted in the December 2004 issue of Management Science.