Bass model (Bass, 1969):

( 1)
() = [ + ] [ ( 1)]

() = () ( 1)

" ()" ()

( 1)
() ( 1) = [ + ] [ ( 1)]

() ( 1) ( 1) ( 1)
= [ + ] [1 ]

As time goes from t-1 to t, cumulative sales goes from N(t-1) to N(t). For a small
time interval , i.e. as time goes from t-t to t, cumulative sales goes from
N(t-t) to N(t).

() ( ) ( ) ( )
= {[ + ] [1 ]}

()()
Define rate of change =

1 () ( ) 1 ( ) ( )
= {[ + ] [1 ]}

()
As 0, and letting () = , we get the differential equation:

()
= [ + ()][1 ()]

Solving this differential equation with the initial condition F(0)=0, we get:

1 exp[( + )]
() =
1 + exp[( + )]

() = () ( 1) = [() ( 1)]

For statistical purposes: F(t) is a cdf (Cumulative density function).

Generalized Bass Model (Bass, Krishnan and Jain, 1994):

( 1) Pr() Pr( 1)
() = [ + ] [ ( 1)] [1 + 1 ]
Pr( 1)

1 exp[( + ) ]
() = ,
1 + exp[( + ) ]

Pr()
= + 1 { }.
Pr(0)

In general,

Pr() () ()
= + 1 { } + 2 { } + 3 { }.
Pr(0) (0) (0)