Diffusion of New Products in Heterogeneous Populations: Incorporating Stochastic Coefficients

Diffusion models have had a major impact on the literature and practice of marketing science. Following the pioneering work of Bass (1969), which suggested a deterministic model for homogeneous populations, the basic diffusion model has been extended to incorporate: changes in the market potential over time (Mahajan & Peterson 1978); complimentarity, substitutability, contigent & independent relations of the new product with other brands in the market place (Peterson & Mahajan 1978); spatial diffusion pattern (Mahajan & Peterson 1979); varying word-of-mouth effects (Easingwood, Mahajan & Muller 1983); various marketing mix effects including the effect of price on both innovation and imitation coefficients (Robinson and Lakhani 1975) or advertising effect on the innovation coefficient (Horsky and Simon 1983). competitive effects (Eliashberg & Jeuland 1982, Fershtman, Mahajan and Muller 1983

Quality, Risk and the Taleb Quadrants

Abstract The definition and the management of quality has evolved and assumed a variety of approaches, responding to an increased variety of needs. In industry, quality and its control has responded to the need of maintaining an industrial process operating as "expected", reducing the process sensitivity to uncontrolled disturbances (robustness) etc. By the same token, in services, quality has been defined as "satisfied customers obtaining the services they expect". Quality management, like risk management, has a general negative connotation, arising from the consequential effects of "non-quality". Quality, just as risk, is measured as a consequence resulting from factors and events defined in terms of the statistical characteristics that underlie these events. Quality and risk may thus converge, both conceptually and technically, expanding the concerns that both domains are confronted with and challenged by. In this paper, we analyze such a prospective convergence between quality and risk, and their management. In particular we emphasize aspects of integrated quality, risk, performance and cost in industry and services. Throughout such applications, we demonstrate alternative approaches to quality management, and their merging with risk management, in order to improve both the quality and risk management processes. In the analysis we apply the four quadrants proposed by Nassim Taleb for mapping consequential risks and their probability structure. Three case studies are provided, one on risk finance, a second one on risk management of telecommunication systems and a third one on quality and reliability of web based services