Presentation of case study: Diffusion in platform-based markets: big data driven agent-based model based on Huotari et al. 2014 in Industrial Big Data Business Morning 10.2.2015 at Tampere University of Technology

1. 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

2. Outline
• Introduction to InformationAnalytics
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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3. 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

4. 11.2.2015 4
Volume
Velocity
Variation
Veracity
Value
Novi Approach to Big Data
Data in Doubt
Data at Rest
Data in Motion
Data in
Many Forms

5. 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

6. 11.2.2015 6
Source: Borshchev & Filippov 2004
Examples of Different
Modeling Methods Used in
Research

7. 11.2.2015 7
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

8. 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

9. 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

10. 11.2.2015 10
Source: http://www.metacritic.com/

11. 11.2.2015 11
The main part of the model:
How consumers choose a console?
• The main variables that affect adoption decisions:
=
𝑨𝒗𝒆𝒓𝒂𝒈𝒆 𝒑𝒆𝒓𝒄𝒆𝒊𝒗𝒆𝒅
𝒒𝒖𝒂𝒍𝒊𝒕𝒚 𝒐𝒇 𝒈𝒂𝒎𝒆𝒔
𝒐𝒏 𝒂 𝒄𝒐𝒏𝒔𝒐𝒍𝒆
𝑷𝒓𝒊𝒄𝒆 𝒐𝒇 𝒂 𝒄𝒐𝒏𝒔𝒐𝒍𝒆
=
𝑭𝒓𝒊𝒆𝒏𝒅𝒔 𝒐𝒏 𝒂 𝒄𝒐𝒏𝒔𝒐𝒍𝒆
𝑷𝒓𝒊𝒄𝒆 𝒐𝒇 𝒂 𝒄𝒐𝒏𝒔𝒐𝒍𝒆
Source: Huotari et al. 2014

12. Decision Rules
• Agents make decisions based on defined decision rules
12/6
The amountof games on a console thatare aligned with the
preferences ofthe player
The amountof
friend among
the playersof 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

13. Example of Decision Making
Based on Big Data
13/6
Which platform will win the competition?
Playstation 3 or Xbox 360?
Number of games Quality of games
Source: Huotari et al. 2014

14. Results of Predicted Sales
Compared Against Real Sales
14/6
Source: Huotari et al. 2014

15. 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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16. 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/