Abstract:

This paper discusses online word-of-mouth communication and uses an agent-based model to investigate the importance of knowledge-based communication for effective diffusion of information. By constructing the model, we focus on three axes: consumer component, number of interaction partners, and consumers’ partner selection rules. Consumers are categorized as Early Adopter, Individualist, Trend Maker, or Follower along "information retrieving" and "information outgoing" axes. According to the simulation of our agent-based model with several scenarios, a cascade of buyers plots a S-shaped curve and that the early adopters buy the good first and the trend makers generate word-of-mouth communication and then it comes over the followers. Besides, if people choose partners on the basis of their personal knowledge levels, both efficient and inefficient diffusion of information emerges. Inefficient diffusion occurs in the case that they choose persons with their similar level of knowledge, while more efficient diffusion occurs in the case that with higher level. This insight may indicate the existence of alpha bloggers or signal the emergence of a new regime in Internet-based communication.

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