Competitive Targeted Marketing
In this paper, we consider two firms diffusing incompatible technologies and their decision of consumer targeting. The technology adoption is made in two steps. First, once the firms sell their products to their respective targeted consumer, the technology is diffused successively by word-of-mouth communication from the initial consumer to other consumers linked along the network. Then, in the second step, each consumer imitates the technology distribution keeps evolving until it reaches the long-run steady state. We demonstrate that the early entrant chooses the minmax location when firms are myopic in the sense that they do not take the imitation possibility into account. If firms consider the possibility of imitation, the best target will tend towards a hub, although the minmax principle in general keeps valid in the sense that it should be the minmax location after considering imitation.
|Date of creation:||Mar 2012|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.iser.osaka-u.ac.jp/index-e.html
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- F. Schweitzer & L. Behera, 2009. "Nonlinear voter models: the transition from invasion to coexistence," The European Physical Journal B - Condensed Matter and Complex Systems, Springer, vol. 67(3), pages 301-318, February.
- Jun, Tackseung & Kim, Jeong-Yoo, 2008.
"A theory of consumer referral,"
International Journal of Industrial Organization,
Elsevier, vol. 26(3), pages 662-678, May.
- Sanjeev Goyal & Andrea Galeotti, 2007.
"A Theory of Strategic Diffusion,"
2007.70, Fondazione Eni Enrico Mattei.
- Katarzyna Sznajd-Weron, 2005. "Sznajd model and its applications," HSC Research Reports HSC/05/04, Hugo Steinhaus Center, Wroclaw University of Technology.
- Jo, Hang-Hyun & Ki Baek, Seung & Moon, Hie-Tae, 2006. "Immunization dynamics on a two-layer network model," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 361(2), pages 534-542.
- Hołyst, Janusz A. & Kacperski, Krzysztof & Schweitzer, Frank, 2000. "Phase transitions in social impact models of opinion formation," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 285(1), pages 199-210.
- Kim, Beom Jun & Jun, Tackseung & Kim, Jeong-Yoo & Choi, M.Y., 2006. "Network marketing on a small-world network," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 360(2), pages 493-504.
- Katarzyna Sznajd-Weron & Jozef Sznajd, 2000. "Opinion evolution in closed community," HSC Research Reports HSC/00/04, Hugo Steinhaus Center, Wroclaw University of Technology.
When requesting a correction, please mention this item's handle: RePEc:dpr:wpaper:0834. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Fumiko Matsumoto)
If references are entirely missing, you can add them using this form.