MODELLING DIFFUSION OF INNOVATIONS WITH HOMOGENEOUS AND HETEROGENEOUS POPULATIONS

Diffusion of innovation can be defined as a system of adoption by which the innovation of a new product or service is spread among the members or agents in a social system. Diffusion models help to forecast the demand and work as a decision aid in making pre-launch, launch and help post-launch strategic choices. This complex system can be approached, in aggregate form, as a function of the number of adopting agents or the number of adoptions, as a function of time and controlling covariates or as a function of the time and spatial aspects simultaneously in the related structure. The process can also be described with simultaneous and dynamic models depending upon whether iinnovations are independent, complementary or substitutes. The present study offers a framework for systematizing the diffusion models in the perspective of existing homogeneity or heterogeneity among the agents. Different models are compared, new models are proposed and their advantages and disadvantages discussed with reference to the Algerian natural gas production time series. Some guidelines for further research extensions are also suggested.