We also discuss how system dynamics modeling can be used in other complex problems in business such as the creation of a global business. Our objective is to present a system dynamics model for the study of the relationship between the buying decision and the decision to participate in word-of-mouth communication. Most prior studies have not focused on a recursive relationship. The relationship between the two decision processes, however, is recursive and dynamic.
Most of the prior research on word-of-mouth focused on studying either the factors that trigger consumers’ participation (sending or receiving) in word-of-mouth activities or the impact word-of-mouth information has on consumers’ buying decisions. Word-of-mouth plays an important role in reducing risk and uncertainty in purchase and consumption. In this article, we illustrate the use of system dynamics modeling approach to study a complex system: word-of-mouth. To profit from good advice requires more wisdom than to give it.
Roman Wong, Shirley Ye Sheng Download this article as a PDF
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