A study of a competitive Bass model which takes into account competition among firms

Competition in some telecommunication services has emerged in Japan since deregulation of telecommunication markets in 1985. As a model which can be used to analyze this competition, an extension of the Bass model, a competitive Bass model, is proposed. This model treats not only competition between two firms, but also competition among n firms. For the case of two firms, an equation which must be satisfied, concerning the sales of the two firms, is derived. For the case of n firms, a necessary condition which must be satisfied, concerning the sales of n firms, is formulated as an eigenvalue problem. The dynamics of the diffusion process corresponding to the values of parameters are analyzed. The diffusion process of a telecommunication service into which new common carriers have recently entered is also discussed.