Modeling the evolution of collective overreaction in dynamic online product diffusion networks

Abstract

With the development of e-commerce, collective overreactions such as buying frenzy have become prominent. However, studies have rarely investigated the mechanism of irrational consumer behavior at the group level. To investigate the evolution of collective overreaction in dynamic online product diffusion networks, we employed a sequential multiple-methods approach. A conceptual model is constructed to capture the influence of social network dynamic evolution on individual irrationality. An agent-based model (ABM) under different network dynamic growth mechanisms is implemented and verified. The findings revealed the following. In external dynamic growth mechanisms, key opinion consumer (KOC) connection can lead to positive collective overreaction (i.e., the adoption rate of consumer groups spikes). This effect fades as the probability of KOC connection increases and stabilizes as the node change rate decreases. Random connection is prone to negative collective overreaction (i.e., a sudden and sharp decline in the adoption rate of consumer groups), and key opinion leader (KOL) connection exhibits both positive and negative collective overreaction. Increasing the edge change rate increases the frequency of negative collective overreaction in KOL connections. In internal dynamic growth mechanisms, KOL and KOC connections are prone to negative collective overreaction; increasing the edge change rate can reduce the frequency of negative collective overreaction in KOL overreaction, and an appropriate edge change rate can inhibit the emergence of negative collective overreaction in KOC connection. This research contributes to the area of internet product marketing and provides a new basic framework through which to combine psychology and the ABM.