The Impact of Social Network Influences on the Cost of Capacity Reservation
Professor Mozart Menezes, Haskayne School of Business, University of Calgary
Room: D634, University Hall
In a connected world where information moves fast and has long reach, mostly through social networks, the disclosure of personal preferences influences consumer behaviour and affects probability distribution of demand in ways that seem hard to predict. Going beyond just taking into account the intrinsic individuals’ preferences, in this paper we attempt to model for the first time the impact that social inner-circles and product market share have on (forecasted) probability distribution of demand. We find that both inner-circles’ influence and market share information may substantially increase demand variability of a product with a consequent substantial impact on costs for matching supply and demand.