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This paper provides an overview of agent-based modeling and simulation (ABMS) and evaluates the questions that have been raised regarding the “assumptions and mechanisms used” by a well-cited paper that has used this methodology.

This work provides a review of agent-based simulation modeling and its capabilities to advance and test theory. The commentary then evaluates and addresses the raised questions and reservations.

Agent-based modeling offers unique capabilities that can be used to explore complex phenomena in business and marketing. Some of the raised reservations may be considered as directions for future research. However, the criticisms are for most part unsupported by existing research and do not undermine the contributions of the paper that is being discussed.

Given its relative novelty, reservations regarding agent-based simulation modeling are quite natural. Discussions like this one would bring together different points of view and lead to a better understanding of how using ABMS can benefit academia and industry.

This commentary is part of an intellectual dialogue that seeks to provide different points of view about agent-based simulation modeling using a specific paper as an example.

The purpose of this research is to determine how managers’ decisions to discontinue products may be affected by their cognitive and demographic characteristics. Research in product management and entrepreneurship has primarily focused on the introduction of innovations and the marketing of emerging and existing products in the marketplace. Considerably less research has focused on product elimination and how marketing managers decide to remove poorly performing products from a given product portfolio. Nevertheless, product elimination decisions are critical to maintaining business health and protecting firm profits, and are a commonly encountered decision for entrepreneurs and managers of existing products. This study empirically explores the role of factors that may affect a manager's decisiveness in eliminating poorly performing products from a product portfolio.

Using a simulated business environment, this study empirically explores the role of factors that may affect a manager’s decisiveness in eliminating poorly performing products from a product portfolio. Product portfolio decisions are presented to a sample of emerging managers using a computer simulation, and the impact of manager characteristics, namely, cognitive style, gender, academic profile and entrepreneurial intentions on product elimination decisiveness is examined using regression analysis.

The findings indicate dominant effects for cognitive style and academic profile in driving the decisiveness of product elimination decisions.

The findings highlight the importance of the academic profile and cognitive style of those entrusted with managing product portfolios, especially as is related to product elimination decisions.

The findings imply a need for determining the optimal fit of candidates for product portfolio management roles, based on factors such as cognitive style, academic performance and academic area of specialization.

Given the role of entrepreneurial enterprises in enabling social equity, this research highlights the need for entrepreneurial education focusing not only on product introduction but also product omission.

This research expands prior research findings on innovation, promotion and elimination of products by asking what happens at the end of a product’s life when the prospects for a product are no longer strong. The research shows that some managers are less decisive and therefore may be challenged when handling product portfolios with sub-performing products. The findings indicate cognitive and academic influences on product elimination indecisiveness and open new avenues for further examining similar influences in managerial decision-making. This line of work therefore encourages inquiry into the drivers of the important decision of product elimination.

The financial industry offers a unique setting to study innovations. Financial innovations have fueled the growth of economies, markets and societies. The financial industry has successfully become the breeding ground for innovative services, processes, business models and technologies. This study seeks to provide a holistic view of the literature on financial innovations, synthesize the research findings and offer future directions for research in light of three market developments that are disrupting the industry and opening up a new era for the financial services industry. Disruptions from within and outside the industry offer new generations of radically innovative services. Moreover, new generations of consumers differ from previous generations in their needs and wants and look for innovative ways to handle their financial needs. Finally, significant developments related to financial innovations have emerged in Asia and developing countries.

This study systematically reviews the academic research literature on financial innovations in two phases. The first phase provides a quantitative review of 546 journal articles published between 1990 and 2018. In the second phase, the study synthesizes the extant research on financial innovations and maps them in five research areas: firms' introduction and adoption of FIs, financial innovation development, the outcomes of financial innovations, regulations and intellectual property, and consumers.

The analysis found that disciplines differ with regard to the employed research methodologies, the units of analysis, sources of data and the innovations they examined. A positive trend in the number of published articles during this period is observed. However, studies have primarily focused on the USA and Europe and less so on other parts of the world. The literature synthesis further identifies research gaps in the available research that highlight future research opportunities in light of the three market disruptions. The financial services industry is on the brink of a new era due to disruptions from within and outside the industry and the entrance of new generations of consumers. Moreover, the financial industry has successfully become the breeding ground for innovative services, processes and business models. Therefore, financial innovations offer promising opportunities for bridging the gap between research on product and service innovations.

The work provides a holistic and systematic overview of extant research on financial innovations and highlights future research opportunities in light of the three disruptive market developments. It helps researchers take advantage of the opportunities in studying financial innovations while maintaining industry relevance.

The study is the first to review and synthesize the academic research literature on financial innovations across marketing, finance and innovation disciplines. In addition, the study highlights three primary disruptive forces in the financial industry and identifies future research directions in light of these disruptive forces.

The purpose of this paper is to explore the relationship between consumers’ subjective and objective financial literacy (OFL) – the necessary knowledge and skills to make effective personal financial decisions – and their effects on opinion leadership and the use of retail financial services.

In total, 486 US participants were surveyed. The demographical profile of the sample roughly resembled that of the USA population.

On average, consumers with moderate levels of OFL report lower subjective financial literacy (SFL) compared to those with low or high levels of OFL. Moreover, while SFL and opinion leadership are positively correlated, consumers with moderate levels of OFL reported lower opinion leadership compared to those with high or low levels of OFL. The paper introduces financial literacy miscalibration as the discrepancy between consumers’ objective and SFL. Financially illiterate respondents who perceived themselves as financially knowledgeable reported high opinion leadership. Finally, a greater percentage of financially – literate consumers reported owning checking and savings accounts, using online and mobile banking for diverse purposes, and making fewer phone calls to customer services, compared to others.

The paper integrates literature from financial literacy, consumer knowledge, and opinion leadership to explain these findings and to further enhance our theoretical and empirical understanding of objective vs SFL.

The discrepancies between objective and SFL may significantly influence consumers’ financial decisions and the degree to which they expose themselves to the pertinent risks. The paper discusses implications for public policy makers as well as marketing managers and researchers.

The study is the first to empirically explore the research questions following the conceptual development.

While existing research has established various methods for pricing, the impact of a manager’s individual psychological profile on his/her price setting behavior is relatively unexamined. This is especially critical in the context of pricing decisions implemented in response to competitive forces. This paper aims to explore how a manager’s price responses to price cuts by a competitor are affected by his/her cognitive style, gender and entrepreneurial attitudes.

In the first study, a simulation-based pricing environment is used in a lab setting to capture the dynamics of pricing decisions made in response to competitive price cuts. Participants’ price responses are captured in the form of the magnitude of price change implemented in a simulated environment in response to a competitor’s price reduction. The second study extends the scope of inquiry by using a national sample of business professionals and replicates and reinforces the findings of the first study by capturing participants’ attitudinal response on the decision to reduce prices in reaction to competitive price reductions.

The results of both studies indicate significant effects for cognitive style, gender and entrepreneurial attitudes. Individuals with stronger entrepreneurial attitudes and analytical cognitive styles, and females are less likely to engage in reactive price reductions.

The findings of this study indicate that managers’ propensity to engage in price changes in reaction to competitors can be linked to their psychological profile and gender.

Given the existence of the relationship between price reactions of managers and their cognitive style and entrepreneurial attitudes, the training and development of pricing professionals may need to take these individual-level factors into account.

This is the first study that has linked managers’ propensity to engage in price changes in reaction to competitors to their gender and psychological profile.

While innovative service systems may create substantial value for certain stakeholders, they often destroy value for others. This value paradox frequently leads to unsustainable service systems. The purpose of this paper is to explore the use of multiple theories to pinpoint and explain these value paradoxes, build a framework allowing potentially more sustainable value configuration of service systems and develop an agenda for future research. The framework is illustrated with examples from the hospitality industry.

The paper draws on prevalent theories and approaches, including service-dominant logic, business modeling, transaction cost economics, stakeholder theory, configuration theory and set theory, to develop a value configuration framework.

In a service system, the configuration of resources and relationships between these resources (i.e. the set of value propositions for various stakeholders of the system) determines which stakeholders will gain and which will lose and to what extent. For that reason, insight into the range of possible service configurations – or business models – will help decision makers consider the effects on various stakeholders, and, where possible, set their priorities right and make their businesses more sustainable. The research produces a rich research agenda.

Examples from hospitality allow an in-depth examination of a range of dynamic configurational and technological innovations, but some idiosyncratic characteristics of the context may impede the wider applicability of the conceptual framework. Future research could complement this work by studying other service sectors.

The paper aims to provide decision makers in the service industry with a conceptual tool to explore, diagnose and, if needed, adjust the value configuration of their service operations. In practice, this tool may help explicate the service system configuration, thus helping managers determine their organizations’ desired positioning in terms of value creation and destruction, and to choose strategic directions by adapting configurations.

Legislation and regulations are being adapted to various new service configurations. This paper attempts to – at least conceptually – distinguish different service configurations, allowing policy makers to identify the value trade-offs between stakeholders, including society at large.

Previous research focused primarily on value creation by innovative services and business models. Value creation for one stakeholder, however, could lead to value destruction for another. Taking this paradox into consideration may result in more open service ecosystems that explicitly consider sustainability and value implications in multiple dimensions and for a broader group of stakeholders.

This study aims to explore optimal pricing strategies for innovations with direct network externalities – the effect that the number of adopters of an innovation has on the utility of the innovation to other potential adopters. Examples of such innovations are fax machines, e‐mail, cellular phones, and software programs such as word processors. The success of these innovations requires a minimum number of adopters.

The paper uses agent‐based modeling and simulation.

The relationship between price and net present value (NPV) of revenue resembles an asymmetric inverse U‐shape. A low‐pricing strategy outperforms high‐pricing, while a moderate‐pricing strategy outperforms both low‐ and high‐pricing strategies. Moreover, heterogeneity of consumer price sensitivity positively affects the NPV of sales.

Pricing durable new products with network externalities is more challenging than other types of innovations. The results indicate that firms can maximize their NPV by adopting a moderate pricing strategy. Moreover, firms must consider heterogeneity of consumer price sensitivity along with the market price elasticity when making pricing decisions. Detailed strategic implications and recommendations are discussed.

Several recent studies have called for examining pricing strategies for new products with network externalities. The study findings challenge the common wisdom that a penetration pricing strategy is an optimal approach for durable products with network externalities. Moreover, while other studies have highlighted the importance of market price elasticity, extensive simulation experiments conducted in this study show that heterogeneity of consumer price sensitivity is an important factor that must be considered. Finally, the study presents an agent‐based modeling approach for exploring optimal pricing of innovations with network externalities.

The purpose of this paper is to investigate the distinct effects of different communication channels, particularly interpersonal networks, social media, and mass media on customer beliefs and usage intention in a mobile banking (MB) context.

This study employed a combination of both qualitative and quantitative research approaches with an exploratory sequential research design in two major phases: focus groups; and a large-scale survey among 183 New Zealand young adults.

The most significant influential factor of usage intention was perceived usefulness, followed by perceived credibility and perceived costs. Face-to-face communication with bank staff and close acquaintances was perceived as the most reliable and persuasive sources of banking-related information. Moreover, mass channels were considered to be more important and trustworthy than social media in the MB sector. The research results revealed that the current status of MB diffusion in New Zealand is in the latter stages (Late Majority and Laggards) of the innovation diffusion cycle.

In light of the research findings, bank marketers can make the right decisions on marketing actions to promote MB effectively as well as develop appropriate communication policies to speed up the consumer decision process. Researchers and allied industries (e.g. mobile commercial services) could also gain benefits from applying these results to understand the impact of communication channels on consumer perceptions and behaviours towards new technology acceptance.

The research outcomes have served to broaden the knowledge into the distinguishing influences of major communication channels on customers’ beliefs and intention to adopt new banking services.