Diffusion in platform-based

markets: big data driven

agent-based model

Jari Jussila

TLO, Novi tutkimuskeskus

Industrial Big Data Business Morning

10.2.2015

Updated 11.2.2015

Outline

• Introduction to Information Analytics

Research at Novi Research Center

• Agent-Based Modeling

• Case Study of Applying Big-data Driven

Agent-Based Model on Diffusion in

Platform-Based Markets

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Examples of Information

Analytics Research at Novi

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increasing amount of research

applying various data science

approaches to big/smart data, e.g.

web scraping, social network analysis,

agent-based modeling

Longitudinal research of business

intelligence’s current state in Finland

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Volume

Velocity

Variation

Veracity

Value

Novi Approach to Big Data

Data in Doubt

Data at Rest

Data in Motion

Data in

Many Forms

Developing and Applying a

Combination of Expertise

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Substantive

Expertise

Machine

Learning

Traditional

Research Danger

Zone

Data

Science

Source: Smith 2010 Venn Diagram of Data Science

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Source: Borshchev & Filippov 2004

Examples of Different

Modeling Methods Used in

Research

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Pontus Huotari (LUT, Lappeenranta University of Technology)

Kati Järvi (LUT)

Samuli Kortelainen (LUT)

Jukka Huhtamäki (TUT, Tampere University of Technology)

Jari Jussila (TUT)

Diffusion in Platform-Based Markets:

Big Data Driven Agent-Based Model

How do competing innovations diffuse in

platform-based markets? PS3 vs. Xbox 360.vs.

Xbox 360.

Why did PS3 get

the most

adopters?

…more games

Xbox 360 was launched a year earlier and had…

… lower price … equally good games

Source: Huotari et al. 2014

Big Data Collection

• The agent-based model was fed with two

different types of data. Firstly, sales data of the

consoles was collected (Geekwire).

• Secondly, we collected data on the games with a

data science approach, using a Web scraper.

– We chose to use the Metacritic (2014) website as

the key source of game related data for our agent-based model. Since Metacritic does not

provide a machine-readable access to interface with its data, a tailored scraper was implemented

to access the data.

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Source: Huotari et al. 2014

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Source: http://www.metacritic.com/

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The main part of the model:

How consumers choose a console?

• The main variables that affect adoption decisions:

=

𝑨𝒗𝒆𝒓𝒂𝒈𝒆 𝒑𝒆𝒓𝒄𝒆𝒊𝒗𝒆𝒅𝒒𝒖𝒂𝒍𝒊𝒕𝒚 𝒐𝒇 𝒈𝒂𝒎𝒆𝒔

𝒐𝒏 𝒂 𝒄𝒐𝒏𝒔𝒐𝒍𝒆𝑷𝒓𝒊𝒄𝒆 𝒐𝒇 𝒂 𝒄𝒐𝒏𝒔𝒐𝒍𝒆

=𝑭𝒓𝒊𝒆𝒏𝒅𝒔 𝒐𝒏 𝒂 𝒄𝒐𝒏𝒔𝒐𝒍𝒆

𝑷𝒓𝒊𝒄𝒆 𝒐𝒇 𝒂 𝒄𝒐𝒏𝒔𝒐𝒍𝒆

Source: Huotari et al. 2014

Decision Rules

• Agents make decisions based on defined decision rules

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The amount of games on a console that are aligned with the

preferences of the player The amount of

friend among the players of a

console

PS3 = Xbox360 PS3 > Xbox360 PS3 < Xbox360

PS3 = Xbox360 Random choice PS3 Xbox360

PS3 > Xbox360 PS3 PS3

a) Xbox360 (games

are preferred) b) PS3 (friends are preferred)

PS3 < Xbox360 Xbox360

a) PS3 (games are

preferred) b) Xbox360 (friends

are preferred)

Xbox360

Source: Huotari et al. 2014

Example of Decision Making

Based on Big Data

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Which platform will win the competition?

Playstation 3 or Xbox 360?

Number of games Quality of games

Source: Huotari et al. 2014

Results of Predicted Sales

Compared Against Real Sales

14/6

Source: Huotari et al. 2014

So What?

• The models can be used to simulate

business decisions

– which action can lead to best increase in

profit?

– what are the business impacts of different

competitor actions?

…

– What would you like to know?

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Further information

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Twitter: @Noviresearch ja @tietojohtaminen

Novi homepage and blog:

https://www.tut.fi/novi/

Slideshare: http://www.slideshare.net/Noviresearch

YouTube: http://youtube.com/noviresearch

Tekes funded SPEED research project:

http://www.tut.fi/novi/projects/speed/