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main low , and the stock of SO vehicles in use will decline over time . If adequate marketing or positive changes in vehicle and fuel utility are not introduced in a timely manner then growth of the unfavorable consumer stock will accelerate the negative reinforcement and drive a decay of potential customers towards zero . In reality , the system is likely to collapse well before then as auto manufacturers , fuel suppliers , and retailers are unable to sustain their investment due to diminishing sales .
Conclusions
The new structure presented in this
paper helps refine the mental model and analysis of market uptake of complex alternative fuel systems with multiple stakeholders and competing interests with significant implications for regulatory and policy development . The results show that under certain conditions if policy or behavior of one stakeholder is out of sync with the others , then negative feedbacks can occur . Policy that focuses on generating growth in one area ( even using SD modeling ) can miss critical structure / behavior and lead to erroneous conclusions when only traditional favorable views are assumed and positive feedbacks occur . The inclusion of the unfavorable view stock and associated loop can play a dominant role in determining the growth or collapse of the system . The negative feedback behavior generated by the unfavorable WOM was not previously observable , not considered in the formulation of US ethanol policy , and narrows the system boundaries in which all stakeholders : consumers , energy companies , ethanol producers , OEMs , and fuel retailers can achieve a positive outcome .
In the real world , there is almost certainly some fraction of dissatisfied customers with a given product . In a mature market it is more likely that the system will behave in a manner comparable to the commonly observed market share fluctuation where the growth of unfavorable views is approximately balanced by forgetting . This reflects a system where multiple loops are dominant . In a nascent industry like the SO fuel and vehicle market the role of unfavorable experiences and WOM can dominate and establish a path dependence early on that can ultimately lead to market collapse . This suggests the critical importance of creating and maintaining a very high positive experience , potentially at the expense of technology growth rate , for initial customers and system stakeholders until system maturity is reached . Although the mathematical possibility of marketing levels and manufacturer subsidies to improve the utility exists , policy makers should be aware that this is not a practical long-term strategy . Other factors that can influence consumer view include policy that influences the price of the fuel , the availability of the fuel at the initial vehicle deployment , or policies that change the amount of technology investment in the powertrain platform and improve the vehicle performance .
To achieve the policy objectives of a regulatory mandate imposed on a single stakeholder all stakeholders have to work together to not only fulfill each of their specifications before the platform launch ( e . g ., create optimized engine , start conversation of stations to be SO fuel compatible , build initial ethanol capacity ), but also create the environment where all these elements work together and guarantee everyday positive experience of early adopters . This can be adjusted through one of several mechanisms : price of the vehicle , availability of the SO fuel , and the price of the fuel . These are balanced by needing to maintain
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