We propose a framework to capture social impact on consumer adoption of new technology products. We integrate social network analysis into the traditional discrete choice analysis through a three-stage process. Using hybrid electric vehicle example, our work demonstrates the need for considering social influence in choice prediction. Our study also offers a dynamic view of how consumer preference may change over time due to social influence.

While discrete choice analysis is prevalent in capturing consumer preferences and describing their choice behaviors in product design, the traditional choice modeling approach assumes that each individual makes independent decisions, without considering the social impact. However, empirical studies show that choice is social – influenced by many factors beyond engineering performance of a product and consumer attributes. To alleviate this limitation, we propose a new choice modeling framework to capture the dynamic influence from social networks on consumer adoption of new products. By introducing social influence attributes into a choice utility function, social network simulation is integrated with the traditional discrete choice analysis in a three-stage process. Our study shows the need for considering social impact in forecasting new product adoption. Using hybrid electric vehicles as an example, our work illustrates the procedure of social network construction, social influence evaluation, and choice model estimation based on data from the National Household Travel Survey. Our study also demonstrates several interesting findings on the dynamic nature of new technology adoption and how social networks may influence hybrid electric vehicle adoption.

Areas of Focus: Energy Markets
Definition
Energy Markets
Well-functioning markets are essential for providing access to reliable, affordable energy. EPIC research is uncovering the policies, prices and information needed to help energy markets work efficiently.
Electric Power
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Electric Power
As the electric power system faces new pressures and opportunities, EPIC research is working to identify the mix of policies needed to accelerate the global transition to clean, reliable, affordable...
Transportation
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Transportation
Mobility is central to economic activity. Yet, a lack of fuel diversity and continued demand growth have made the transportation industry a major contributor to global pollution and carbon emissions....
Definition
Well-functioning markets are essential for providing access to reliable, affordable energy. EPIC research is uncovering the policies, prices and information needed to help energy markets work efficiently.