A General Framework to Forecast the Adoption of Novel Products

A General Framework to Forecast the Adoption of Novel Products: A Case of Autonomous Vehicles

Dubey, S.K. (TU Delft Transport and Planning)
Sharma, Ishant (University of Memphis)
Mishra, Sabyasachee (University of Memphis)
Cats, O. (TU Delft Transport and Planning)
Bansal, Prateek (National University of Singapore)

2022

Due to the unavailability of prototypes, the early adopters of novel products actively seek information from multiple sources (e.g., media and social networks) to minimize the potential risk. The existing behavior models not only fail to capture the information propagation within the individual's social network, but also they do not incorporate the impact of such word-of-mouth (WOM) dissemination on the consumer's risk preferences. Moreover, even cutting-edge forecasting models rely on crude/synthetic consumer behavior models. We propose a general framework to forecast the adoption of novel products by developing a new consumer behavior model and integrating it into a population-level agent-based model. Specifically, we extend the hybrid choice model to estimate consumer behavior, which incorporates social network effects and interplay between WOM and risk aversion. The calibrated consumer behavior model and synthetic population are passed through the agent-based model for forecasting the product market share. We apply the proposed framework to forecast the adoption of autonomous vehicles (AVs) in Nashville, USA. The consumer behavior model is calibrated with a stated preference survey data of 1,495 Nashville residents. The output of the agent-based model provides the effect of the purchase price, post-purchase satisfaction, and safety measures/regulations on the forecasted AV market share. With an annual AV price reduction of 5% at the initial purchase price of $60,000 and 90% of satisfied adopters, AVs are forecasted to attain around 80% market share in thirty-one years. These findings are crucial for policymakers to develop infrastructure plans and manufacturers to conduct an after-sales cost-benefit analysis.

Autonomous vehicles
Novel technology adoption
Risk aversion
Social network
Word of mouth

http://resolver.tudelft.nl/uuid:728f9992-0654-4632-9b76-25da2c872b24

https://doi.org/10.1016/j.trb.2022.09.009

0191-2615

Transportation Research. Part B: Methodological, 165, 63-95

Institutional Repository

journal article

© 2022 S.K. Dubey, Ishant Sharma, Sabyasachee Mishra, O. Cats, Prateek Bansal