Bass' Model

Single Peak Theory

Simpler & Quantitative

• Where:
  f(t) is the rate of change of the installed base fraction
  F(t) is the installed base fraction
  p is the coefficient of innovation
  q is the coefficient of imitation

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

Application

• The coefficient p is called the coefficient of innovation, external influence or advertising effect. The coefficient q is called the coefficient of imitation, internal influence or word-of-mouth effect.

• Typical values of p and q when time t is measured in years:

• The average value of p has been found to be 0.03, and is often less than 0.01

• The average value of q has been found to be 0.38, with a typical range between 0.3 and 0.5

•  A case of a commodity is as follows.

Comments on Its Validity

• Theory Development

• Mixed up "Promoters" and "Adopters"

• "Word-of-mouth" is Today's "Experience" and Wu's "Social Belief" that is a Widely Perceived "External Factor"

• Adoption Is Sales (Dollars/Units)?

• Products’ Characteristics Do Not Matter?

• Methodology

• Data Manipulation and Its Consistency?

• Single Peak?

• Bass's Bad Cases/ Twin Peaks?

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• Statisticians without Empirical Study