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The diffusion of interactive communication innovations and the critical mass: the adoption of telecommunications services by German banks

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  • Mahler, Alwin
  • Rogers, Everett M.
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    Abstract

    Interactive innovations are distinctive in that their adoption depends on the perceived number of others who have already adopted the innovation. Thus their rate of adoption does not take off in the familiar "S" shape until a critical mass of adopters has been reached. Data on the adoption of 12 telecommunications services by 392 German banks are used to explore our theoretical perspective on the role of the critical mass in the diffusion of interactive innovations. The most important obstacle to the adoption of new telecommunications services by banks is a low degree of diffusion (which suggests the general importance of the critical mass). These obstacles do not differ for the innovators and other adopter categories. The importance of direct network externalities in influencing the rate of diffusion of new telecommunications services should be determined for each new service, rather than assumed to always exists.

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    Bibliographic Info

    Article provided by Elsevier in its journal Telecommunications Policy.

    Volume (Year): 23 (1999)
    Issue (Month): 10-11 (November)
    Pages: 719-740

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    Handle: RePEc:eee:telpol:v:23:y:1999:i:10-11:p:719-740

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    Related research

    Keywords: Diffusion of innovations Interactive innovations Critical mass Telecom services adoption;

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    Cited by:
    1. Corrocher, Nicoletta, 2006. "Internet adoption in Italian banks: An empirical investigation," Research Policy, Elsevier, vol. 35(4), pages 533-544, May.
    2. Lim, Byeong-Lak & Choi, Munkee & Park, Myeong-Cheol, 2003. "The late take-off phenomenon in the diffusion of telecommunication services: network effect and the critical mass," Information Economics and Policy, Elsevier, vol. 15(4), pages 537-557, December.
    3. Sangin Park, 2004. "Strategic Maneuvering and Standardization: Critical Advantage or Critical Mass?," Econometric Society 2004 Far Eastern Meetings 596, Econometric Society.
    4. Grajek, MichaƂ & Kretschmer, Tobias, 2012. "Identifying critical mass in the global cellular telephony market," International Journal of Industrial Organization, Elsevier, vol. 30(6), pages 496-507.
    5. Meade, Nigel & Islam, Towhidul, 2006. "Modelling and forecasting the diffusion of innovation - A 25-year review," International Journal of Forecasting, Elsevier, vol. 22(3), pages 519-545.
    6. Zhang, Marina Y. & Dodgson, Mark, 2007. ""A roasted duck can still fly away": A case study of technology, nationality, culture and the rapid and early internationalization of the firm," Journal of World Business, Elsevier, vol. 42(3), pages 336-349, September.
    7. Guseo, Renato & Guidolin, Mariangela, 2010. "Cellular Automata with network incubation in information technology diffusion," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 389(12), pages 2422-2433.
    8. Nicoletta Corrocher, 2002. "Does Internet banking substitute traditional banking? Empirical evidence from Italy," KITeS Working Papers 134, KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy, revised Jul 2002.
    9. Jackie Krafft, 2003. "Vertical structure of the industry and competition: an analysis of the info-communications industry," Post-Print hal-00203652, HAL.
    10. Liangjie Zhao & Wenqi Duan, 2014. "Simulating the Evolution of Market Shares: The Effects of Customer Learning and Local Network Externalities," Computational Economics, Society for Computational Economics, vol. 43(1), pages 53-70, January.

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