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Technology Adoption in a Hierarchical Network

Author

Listed:
  • Xintong Han

    (Concordia University, Department of Economics, 1455 de Maisonneuve Blvd. West, Montreal, Quebec H3G 1M8, Canada)

  • Lei Xu

    (Toulouse School of Economics, 21 Allee de Brienne, 31000 Toulouse, France)

Abstract

This paper studies the effect of network structure on technology adoption, in the setting of the Python programming language. A major release of Python, Python 3, provides more advanced but backward-incompatible features to Python 2. We model the dynamics of Python 3 adoption made by package developers. Python packages form a hierarchical network through dependency requirements. The adoption decision involves not only updating one's own source code, but also dealing with dependency packages lacking Python 3 support. We build a dynamic model of technology adoption where each package makes an irreversible decision to provide support for Python 3. The optimal timing of adoption requires a prediction of all future states, for the package itself as well as each of its dependencies. With a complete dataset of package characteristics for all historical releases, we are able to draw the complete hierarchical structure of the network, and simplify the estimation by grouping packages into different layers based on the dependency relationship. We study how individual adoption decisions can propagate along the links in such a hierarchical network. We also test the effectiveness of various counterfactual policies that can promote a faster adoption process.

Suggested Citation

  • Xintong Han & Lei Xu, 2018. "Technology Adoption in a Hierarchical Network," Working Papers 18-05, NET Institute.
    • Handle: RePEc:net:wpaper:1805
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    References listed on IDEAS

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    More about this item

    Keywords

    Technology Adoption; Network Structure; Hierarchical Network; Input-Output Network; Dynamics; Network Effects; Python;
    All these keywords.

    JEL classification:

    • C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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