The NLS-based grey Bass model for simulating new product diffusion

Yanyu Wang, Lingling Pei and Zhengxin Wang

To solve the problems inherent in the existing Bass model, this paper develops a grey Bass model using a non-linear least squares method (NLS) and provides the whitenisation solution of differential equations.

Introduction

The Bass model (Bass 1969) is one of the core solutions in innovation diffusion. Combining the external model proposed by Fourt and Woodlock in 1960 and the internal model developed by Mansfield in 1961, Bass proved the one-time purchasing model through research into the diffusion process of 11 kinds of durable goods (Bass 1969). Because of the simple structure and the explicit economic meanings of the parameters, the Bass model is widely applied in new product prediction (Lee et al. 2014; Scaglione et al. 2015), business model diffusion (Seol et al., 2012; Marshall et al....

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