Specifying and Modelling the Competitive Diffusion of Fashion Consumption

Evidence from the Film Market

Abstract

The competitive environment of the fashion market constitutes a key prerequisite for understanding the distinctive diffusion patterns of fashion consumption, while imperfect substitution represents a fundamental characteristic of competition in fashion consumption diffusion. To address these features, this study relaxes two fundamental assumptions of the classical Bass Diffusion Model. Specifically, the model is extended from a single-product framework to a multi-product competitive diffusion framework and from simultaneous market entry to sequential market entry, resulting in a competitive diffusion model that incorporates innovation, imitation, and competition effects. Simulation results indicate that stronger substitution effects accelerate the decay of the diffusion process, whereas stronger complementarity effects accelerate diffusion. Moreover, the interaction between competition coefficients and market entry intervals gives rise to different competitive dynamics. Empirical analyses based on films released during the 2021 Chinese New Year Release Window and the 2015 National Day Release Window demonstrate that, compared with the classical Bass Diffusion Model, the proposed competitive diffusion model substantially improves both model fit and predictive performance. Furthermore, the estimated competition coefficients effectively capture the substitutive and complementary relationships among competing films.