Diffusion Models for B2B, B2C, and P2P Exchanges and E-Speak

Consulting groups are predicting that the future of business-to-business (B2B) and business-to-consumer (B2C) exchanges will generate exponentially increasing revenues. However, the economic uncertainties in the market and technological innovations, such as peer-to-peer (P2P) networks and e-Speak from Hewlett Packard, may significantly alter the outlook for the current exchanges. In this study, we adopted a diffusion model for B2B, B2C, and P2P exchanges and e-Speak to capture the future revenue potentials of these electronic exchanges. We simulated the proposed model to incorporate possible market uncertainties. We initially analyzed the case where B2B and B2C increased exponentially. Then, we considered the case of migration from B2B and B2C to P2P and e-Speak. We tested the rate of diffusion with respect to certain parameters, such as imitation, innovation, market potential, and switching rate. With the set of parameters we used, we found out that the effect of imitation was stronger than innovation. The switching rate played an important role in how easy it was for agents to move to later technologies. The inertia factor determined the winner in the marketplace, based on the values, making it more expensive or less expensive to switch to later technologies.