Improving Diffusion Forecasts Using Social Interactions Data

45 Pages Posted: 8 Sep 2011

See all articles by Olivier Toubia

Olivier Toubia

Columbia Business School - Marketing

Jacob Goldenberg

Hebrew University of Jerusalem - Jerusalem School of Business Administration

Rosanna Garcia

Northeastern University - Marketing Area

Date Written: October 20, 2010

Abstract

We propose an approach for using data on social interactions (e.g., number of recommendations received by consumers, number of recommendations given by adopters, number of social ties) in order to improve the forecasts made by extant diffusion models. We extend major extant diffusion models to capture explicitly the generation of social interactions and their impact on adoption. In particular, we extend the discrete-time versions of the Mixed Influence Model (Bass model), the Asymmetric Influence Model, and the Karmeshu-Goswami Model. The extended models may be calibrated using a combination of social interactions data and penetration data. A field study conducted in collaboration with a Consumer Packaged Goods company suggests that the incorporation of social interactions data results in improved diffusion forecasts. The field study also suggests that the benefit of using social interactions data comes in great part from an improved ability to select, based on in-sample fit, the model that will produce the best forecasts.

Keywords: diffusion models, forecasting, innovations, measurement, social networks

Suggested Citation

Toubia, Olivier and Goldenberg, Jacob and Garcia, Rosanna, Improving Diffusion Forecasts Using Social Interactions Data (October 20, 2010). Available at SSRN: https://ssrn.com/abstract=1923682 or http://dx.doi.org/10.2139/ssrn.1923682

Olivier Toubia (Contact Author)

Columbia Business School - Marketing ( email )

New York, NY 10027
United States

Jacob Goldenberg

Hebrew University of Jerusalem - Jerusalem School of Business Administration ( email )

Mount Scopus
Jerusalem, 91905
Israel
972-2-5883226 (Phone)
972-2-58813 (Fax)

Rosanna Garcia

Northeastern University - Marketing Area ( email )

Boston, MA 02115
United States

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