Product Diffusion in a Market with Network Externalities: An Approach from the Viewpoint of Value-creation among Consumers

Abstract

Markets with network externalities, such as those for mobile telephones and internet services, have been growing. Network externalities are defined as externalities by which a consumer's utility depends on the number of users who use the same product. In such markets, high technology does not necessarily produce value in society because value is created through interaction among consumers. This study consumer agent model based on results of a general lifestyle survey, and secondly construct a multi-agent system with consumer agents. Subsequently, we analyze decision-making through interaction among producers and consumers. Finally, we discuss the problem of product diffusion from the viewpoint of value-creation.