A Punctuated-Equilibrium Model of Technology Diffusion
AbstractWe present an evolutionary model of technology diffusion in which an old and a new technology are available, both of which improve their performance incrementally over time. Technology adopters make repeated choices between the established and the new technology based on their perceived performance, which is subject to uncertainty. Both technologies exhibit positive externalities, or performance benefits from others using the same technology. We find that the superior technology will not necessarily be broadly adopted by the population. Externalities cause two stable usage equilibria to exist, one with the old technology being the standard and the other with the new technology the standard. Punctuations, or sudden shifts, in these equilibria determine the patterns of technology diffusion. The time for an equilibrium punctuation depends on the rate of incremental improvement of both technologies, and on the system's resistance to switching between equilibria. If the new technology has a higher rate of incremental improvement, it is adopted faster, and adoption may precede performance parity if the system's resistance to switching is low. Adoption of the new technology may trail performance parity if the system's resistance to switching is high.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by INFORMS in its journal Management Science.
Volume (Year): 45 (1999)
Issue (Month): 2 (February)
technology diffusion; punctuated equilibria; network externalities; path dependence; dynamic systems; evolutionary models; simulation;
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Narayanan, V.K. & Chen, Tianxu, 2012. "Research on technology standards: Accomplishment and challenges," Research Policy, Elsevier, vol. 41(8), pages 1375-1406.
- Zhang, T. & Nuttall, W.J., 2007. "An Agent Based Simulation Of Smart Metering Technology Adoption," Cambridge Working Papers in Economics 0760, Faculty of Economics, University of Cambridge.
- Costa, Álvaro & Fernandes, Ruben, 2012. "Urban public transport in Europe: Technology diffusion and market organisation," Transportation Research Part A: Policy and Practice, Elsevier, vol. 46(2), pages 269-284.
- Bonaccorsi, Andrea & Rossi, Cristina, 2003. "Why Open Source software can succeed," Research Policy, Elsevier, vol. 32(7), pages 1243-1258, July.
- Stephan Aier & Tobias Bucher & Robert Winter, 2011. "Critical Success Factors of Service Orientation in Information Systems Engineering," Business & Information Systems Engineering, Springer, vol. 3(2), pages 77-88, April.
- Rui Leite & Aurora Teixeira, 2012. "Innovation diffusion with heterogeneous networked agents: a computational model," Journal of Economic Interaction and Coordination, Springer, vol. 7(2), pages 125-144, October.
- Minniti, Maria, 2004. "Entrepreneurial alertness and asymmetric information in a spin-glass model," Journal of Business Venturing, Elsevier, vol. 19(5), pages 637-658, September.
- Warr, Benjamin & Ayres, Robert, 2006. "REXS: A forecasting model for assessing the impact of natural resource consumption and technological change on economic growth," Structural Change and Economic Dynamics, Elsevier, vol. 17(3), pages 329-378, September.
- Yair Orbach & Gila Fruchter, 2014. "Predicting product life cycle patterns," Marketing Letters, Springer, vol. 25(1), pages 37-52, March.
- Carrillo-Hermosilla, Javier, 2006. "A policy approach to the environmental impacts of technological lock-in," Ecological Economics, Elsevier, vol. 58(4), pages 717-742, July.
- Antonelli, Cristiano, 2004.
"The System Dynamics of Collective Knowledge: from Gradualism and Saltationism to Punctuated Change,"
Department of Economics and Statistics Cognetti de Martiis LEI & BRICK - Laboratory of Economics of Innovation "Franco Momigliano", Bureau of Research in Innovation, Complexity and Knowledge, Collegio
200404, University of Turin.
- Antonelli, Cristiano, 2007. "The system dynamics of collective knowledge: From gradualism and saltationism to punctuated change," Journal of Economic Behavior & Organization, Elsevier, vol. 62(2), pages 215-236, February.
- Grajek, Michał & Kretschmer, Tobias, 2012. "Identifying critical mass in the global cellular telephony market," International Journal of Industrial Organization, Elsevier, vol. 30(6), pages 496-507.
- 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.
- José López-Sánchez & José Arroyo-Barrigüete & Domingo Ribeiro, 2008. "Development of a technological competition model in the presence of network effects from the modified law of Metcalfe," Service Business, Springer, vol. 2(2), pages 83-98, June.
- Armstrong, Michael J & Levesque, Moren, 2002. "Timing and quality decisions for entrepreneurial product development," European Journal of Operational Research, Elsevier, vol. 141(1), pages 88-106, August.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mirko Janc).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.