Impact of Social Networks on Diffusion of Products



Yudai Arai, Tomoko Kajiyama and Noritomo Ouchi


In light of the rapid growth of social networks around the world, this study analyses the impact of social networks on the diffusion of products and demonstrates the effective way to diffuse products in the society where social networks play an important role. We construct a consumer behaviour model by multi-agent simulation taking the movie market as an example. After validating it by using data from 13 US movies, we conduct simulations. Our simulation results show that the impact of social networks on the diffusion differs according to the customers’ expectations and evaluation for a movie. We also demonstrate the effective weekly advertising budget allocations corresponding to the types of movies. We find that the difference of weekly advertising budget allocations gives greater impact on the diffusion with the growth of social networks. This paper provides firm’s managers with important suggestions for diffusion strategy considering the impact of social networks.


Social networks, diffusion strategy, consumer behaviour model, multi-agent simulation.


  • Barabasi, A. L. and Albert, R. (1999) ‘Emergence of Scaling in Random Networks’, Science, 286, pp. 509-512.
  • Bass, F. M. (1969) ‘A New Product Growth Model for Consumer Durables’, Management Science, 15:5, pp. 215-227.
  • Duan, W., Gu, B. and Whinston, A. B. (2008) ‘The Dynamics of Online Word-of-Mouth and Product Sales –An Empirical Investigation of the Movie Industry’, Journal of Retailing, 84:2, pp. 233-242.
  • Libai, B., Muller, E. and Peres, R. (2009) ‘The Diffusion of Services’, Journal of Marketing Research, 46,:2, pp. 163-175.
  • Mittal, V., Kumar, P. and Tsiros, M. (1999) ‘Attribute-Level Performance Satisfactions, and Behavioural Intentions over Time: A Consumptions-System Approach’, Journal of Marketing, 63;2, pp. 88-101.
  • Plouffe, C. R., Vandebosch, M. and Hulland, J. (2001) ‘Intermediating Technologies and Multi- Group Adoption: A Comparison of Consumers and Merchant Adoption Intentions toward a New Electric Payment System’, Journal of Product Innovation Management, 18:2, pp. 65-81.
  • Tilman, A. S., Gunter, L. and Jurgen, R. (2007) ‘Agent-Based Simulation of Consumer Behaviour in Grocery Shopping on a Regional Level’, Journal of Business Research, 60:8, pp. 894-903.
  • Tsui, H. C. (2012) ‘Advertising, Quality, Willingness-to-Pay: Experimental Examination of Signaling Theory’, Journal of Economic Psychology, 33:6, pp. 1193-1203.

RNI Registration No. CHAENG/2016/68678