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Keywords:

  • online communities;
  • demand;
  • social learning processes;
  • preference formation;
  • threshold effects;
  • computer simulation

Abstract

This study examines the participation of firms in online communities as a means to enhance demand for their products. We begin with theoretical arguments and then develop a simulation model to illustrate how demand evolves as a function of interpersonal communication and a firm's chosen strategy. In this model, the firm's strategy involves allocating advocates who promote its product in online communities. Our model results point to some key parameters informing firms' strategies when social learning processes shape demand. Copyright © 2008 John Wiley & Sons, Ltd.