Abstract: Based on the Bass model which is the most representative of innovative product diffusion, an improved model of product sales in a duopoly competitive market environment was constructed. The model considered the internal influence between competitive products in the diffusion process and the "hesitant" behavior of some consumers in making purchase decisions. A system dynamics modeling was used to simulate the product demand under different market competitive environments. The simulation proved that in the competitive environment of duopoly products, the "hesitant" behavior of consumers has a negative impact on the market demand of products. Moreover, the gap in the competitive status of the enterprise will reduce the demand for products of competitive disadvantages. Therefore, enterprises at a competitive disadvantage should strengthen the word-of-mouth influence of their products, such as improving the user experience and encouraging the active feedback from users to make up for the shortcomings in the competition.

Key words: new product diffusion, Bass model, duopoly market, consumer behavior, system dynamics