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r"""Bass diffusion model for product adoption.
Adapted from Wiki: https://en.wikipedia.org/wiki/Bass_diffusion_model
The Bass diffusion model, developed by Frank Bass in 1969, is a mathematical model that describes
the process of how new products get adopted in a population over time. It is widely used in
marketing, forecasting, and innovation studies to predict the adoption rates of new products
and technologies.
Mathematical Formulation
-----------------------
The model is based on a differential equation that describes the rate of adoption:
.. math::
\frac{f(t)}{1-F(t)} = p + q F(t)
Where:
- :math:`F(t)` is the installed base fraction (cumulative proportion of adopters)
- :math:`f(t)` is the rate of change of the installed base fraction (:math:`f(t) = F'(t)`)
- :math:`p` is the coefficient of innovation or external influence
- :math:`q` is the coefficient of imitation or internal influence
The solution to this equation gives the adoption curve:
.. math::
F(t) = \frac{1 - e^{-(p+q)t}}{1 + (\frac{q}{p})e^{-(p+q)t}}
The adoption rate at time t is given by:
.. math::
f(t) = (p + q F(t))(1 - F(t))
Key Parameters
-------------
The model has three main parameters:
- :math:`m`: Market potential (total number of eventual adopters)
- :math:`p`: Coefficient of innovation (external influence) - typically 0.01-0.03
- :math:`q`: Coefficient of imitation (internal influence) - typically 0.3-0.5
Parameter Interpretation
-----------------------
- A higher :math:`p` value indicates stronger external influence (advertising, marketing)
- A higher :math:`q` value indicates stronger internal influence (word-of-mouth, social interactions)
- The ratio :math:`q/p` indicates the relative strength of internal vs. external influences
- The peak of adoption occurs at time :math:`t^* = \frac{\ln(q/p)}{p+q}`
Applications
-----------
The Bass model has been applied to forecast the adoption of various products and technologies:
- Consumer durables (TVs, refrigerators)
- Technology products (smartphones, software)
- Pharmaceutical products
- Entertainment products
- Services and subscriptions
This implementation provides a Bayesian version of the Bass model using PyMC, allowing for:
- Uncertainty quantification through prior distributions
- Hierarchical modeling for multiple products/markets
- Extension to incorporate additional factors
Examples
--------
Create a basic Bass model for multiple products:
.. plot::
:context: close-figs
import matplotlib.pyplot as plt
import numpy as np
import pandas as pd
import pymc as pm
from pymc_marketing.bass.model import create_bass_model
from pymc_marketing.plot import plot_curve
from pymc_extras.prior import Prior
# Create time points - 3 years of monthly data
n_dates = 12 * 3
dates = pd.date_range(start="2020-01-01", periods=n_dates, freq="MS")
t = np.arange(n_dates)
# Define coordinates for multiple products
coords = {"T": t, "product": ["A", "B", "C"]}
# Define priors
priors = {
"m": Prior("DiracDelta", c=10_000), # Market potential
"p": Prior("Beta", alpha=13.85, beta=692.43, dims="product"), # Innovation coefficient
"q": Prior("Beta", alpha=36.2, beta=54.4), # Imitation coefficient
"likelihood": Prior("Poisson", dims=("T", "product")),
}
# Create the Bass model
model = create_bass_model(t, observed=None, priors=priors, coords=coords)
# Sample from the prior predictive distribution
with model:
idata = pm.sample_prior_predictive()
# Plot the adoption curves
fig, axes = plt.subplots(1, 3, figsize=(10, 6))
idata.prior["y"].pipe(plot_curve, "T", axes=axes)
plt.suptitle("Bass Model Prior Predictive Adoption Curves")
plt.tight_layout()
plt.show()
"""
from typing import Any
import pymc as pm
import pytensor.tensor as pt
from pymc.model import Model
from pymc_extras.prior import Censored, Prior, VariableFactory, create_dim_handler
[docs]
def F(
p: float | pt.TensorVariable,
q: float | pt.TensorVariable,
t: float | pt.TensorVariable,
) -> pt.TensorVariable:
r"""Installed base fraction (cumulative adoption proportion).
This function calculates the cumulative proportion of adopters at time t,
representing the fraction of the potential market that has adopted the product.
Parameters
----------
p : float or TensorVariable
Coefficient of innovation (external influence)
q : float or TensorVariable
Coefficient of imitation (internal influence)
t : array-like or TensorVariable
Time points
Returns
-------
TensorVariable
The cumulative proportion of adopters at each time point
Notes
-----
This is the solution to the Bass differential equation:
.. math::
F(t) = \frac{1 - e^{-(p+q)t}}{1 + (\frac{q}{p})e^{-(p+q)t}}
When :math:`t=0`, :math:`F(t)=0`, and as :math:`t` approaches infinity, :math:`F(t)` approaches 1.
"""
return (1 - pt.exp(-(p + q) * t)) / (1 + (q / p) * pt.exp(-(p + q) * t))
[docs]
def f(
p: float | pt.TensorVariable,
q: float | pt.TensorVariable,
t: float | pt.TensorVariable,
) -> pt.TensorVariable:
r"""Installed base fraction rate of change (adoption rate).
This function calculates the rate of new adoptions at time t as a
proportion of the potential market. It represents the probability density
function of adoption time.
Parameters
----------
p : float or TensorVariable
Coefficient of innovation (external influence)
q : float or TensorVariable
Coefficient of imitation (internal influence)
t : array-like or TensorVariable
Time points
Returns
-------
TensorVariable
The adoption rate at each time point as a fraction of potential market
Notes
-----
This is the derivative of F(t) with respect to time:
.. math::
f(t) = \frac{(p+q)^2 \cdot e^{-(p+q)t}}{p \cdot (1+\frac{q}{p}e^{-(p+q)t})^2}
Alternatively:
.. math::
f(t) = (p + q \cdot F(t)) \cdot (1 - F(t))
The peak adoption rate occurs at time :math:`t^* = \frac{\ln(q/p)}{p+q}`
"""
return (p * pt.square(p + q) * pt.exp(t * (p + q))) / pt.square(
p * pt.exp(t * (p + q)) + q
)
[docs]
def create_bass_model(
t: pt.TensorLike,
observed: pt.TensorLike | None,
priors: dict[str, Prior | Censored | VariableFactory],
coords: dict[str, Any],
) -> Model:
r"""Define a Bass diffusion model for product adoption forecasting.
This function creates a Bayesian Bass diffusion model using PyMC to forecast
product adoption over time. The Bass model captures both innovation (external
influence like advertising) and imitation (internal influence like word-of-mouth)
effects in the adoption process.
The model includes the following components:
- Market potential 'm': Total number of eventual adopters
- Innovation coefficient 'p': Measures external influence
- Imitation coefficient 'q': Measures internal influence
- Adopters over time: Number of new adopters at each time point
- Innovators: Adopters influenced by external factors
- Imitators: Adopters influenced by previous adopters
- Peak adoption time: When adoption rate reaches maximum
Parameters
----------
t : pt.TensorLike
Time points for which the adoption is modeled.
observed : pt.TensorLike | None
Observed adoption data at each time point. If None, only
prior predictive sampling is possible.
priors : dict[str, Prior | Censored | VariableFactory]
Dictionary containing priors for:
- 'm': Market potential prior
- 'p': Innovation coefficient prior
- 'q': Imitation coefficient prior
- 'likelihood': Observation likelihood model
coords : dict[str, Any]
Coordinate values for dimensions in the model, including
'date' for the time dimension and any other dimensions
included in the prior specifications.
Returns
-------
Model
A PyMC model object for the Bass diffusion model, containing
the variables m, p, q, adopters, innovators, imitators, peak,
and the likelihood y.
Notes
-----
The returned model can be used for prior predictive checks, posterior
sampling, and posterior predictive checks to forecast product adoption.
The model implements the following mathematical relationships:
.. math::
\text{adopters}(t) &= m \cdot f(p, q, t) \\
\text{innovators}(t) &= m \cdot p \cdot (1 - F(p, q, t)) \\
\text{imitators}(t) &= m \cdot q \cdot F(p, q, t) \cdot (1 - F(p, q, t)) \\
\text{peak} &= \frac{\ln(q) - \ln(p)}{p + q}
"""
with pm.Model(coords=coords) as model:
parameter_dims = (
set(priors["p"].dims).union(priors["q"].dims).union(priors["m"].dims)
)
likelihood_dims = set(getattr(priors["likelihood"], "dims", ()) or ())
combined_dims = (
"T",
*tuple(parameter_dims.union(likelihood_dims).difference(["T"])),
)
dim_handler = create_dim_handler(combined_dims)
m = dim_handler(priors["m"].create_variable("m"), priors["m"].dims)
p = dim_handler(priors["p"].create_variable("p"), priors["p"].dims)
q = dim_handler(priors["q"].create_variable("q"), priors["q"].dims)
time = dim_handler(t, "T")
adopters = pm.Deterministic("adopters", m * f(p, q, time), dims=combined_dims)
pm.Deterministic(
"innovators",
m * p * (1 - F(p, q, time)),
dims=combined_dims,
)
pm.Deterministic(
"imitators",
m * q * F(p, q, time) * (1 - F(p, q, time)),
dims=combined_dims,
)
peak = (pt.log(q) - pt.log(p)) / (p + q)
peak_dims = tuple(parameter_dims) if parameter_dims else None
pm.Deterministic("peak", peak, dims=peak_dims)
priors["likelihood"].dims = combined_dims
priors["likelihood"].create_likelihood_variable( # type: ignore
"y",
mu=adopters,
observed=observed,
)
return model
