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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.

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.

Suggested Citation

  • Mahler, Alwin & Rogers, Everett M., 1999. "The diffusion of interactive communication innovations and the critical mass: the adoption of telecommunications services by German banks," Telecommunications Policy, Elsevier, vol. 23(10-11), pages 719-740, November.
  • Handle: RePEc:eee:telpol:v:23:y:1999:i:10-11:p:719-740
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    Cited by:

    1. Baburin, Vyacheslav & Zemtsov, Stepan, 2014. "Diffussion of ICT-products and "five Russias"," MPRA Paper 68926, University Library of Munich, Germany, revised 10 May 2014.
    2. Yeong-Wha Sawng & Kazuyuki Motohashi & Gang-Hoon Kim, 2013. "Comparative analysis of innovative diffusion in the high-tech markets of Japan and South Korea: a use–diffusion model approach," Service Business, Springer;Pan-Pacific Business Association, vol. 7(1), pages 143-166, March.
    3. Hsu, Chin-Lung & Lu, Hsi-Peng & Hsu, Huei-Hsia, 2007. "Adoption of the mobile Internet: An empirical study of multimedia message service (MMS)," Omega, Elsevier, vol. 35(6), pages 715-726, December.
    4. Scaglione, Miriam & Giovannetti, Emanuele & Hamoudia, Mohsen, 2015. "The diffusion of mobile social networking: Exploring adoption externalities in four G7 countries," International Journal of Forecasting, Elsevier, vol. 31(4), pages 1159-1170.
    5. Raven, Michael & Blind, Knut, 2017. "The characteristics and impacts of scientific publications in biotechnology research referenced in standards," Technological Forecasting and Social Change, Elsevier, vol. 115(C), pages 167-179.
    6. Sangin Park, 2004. "Strategic Maneuvering and Standardization: Critical Advantage or Critical Mass?," Econometric Society 2004 Far Eastern Meetings 596, Econometric Society.
    7. 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.
    8. Kim, Moon-Soo & Kim, Ho, 2007. "Is there early take-off phenomenon in diffusion of IP-based telecommunications services?," Omega, Elsevier, vol. 35(6), pages 727-739, December.
    9. Fildes, Robert & Kumar, V., 2002. "Telecommunications demand forecasting--a review," International Journal of Forecasting, Elsevier, vol. 18(4), pages 489-522.
    10. Apanasevic, Tatjana, 2014. "Mobile payments: Main trends in the retail industry," 25th European Regional ITS Conference, Brussels 2014 101428, International Telecommunications Society (ITS).
    11. Rand H. Al-Dmour & Steve Love, 2015. "Determinants of the implementation of HRIS applications in business organisations in Jordan," International Journal of Human Resources Development and Management, Inderscience Enterprises Ltd, vol. 15(1), pages 69-96.
    12. 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.
    13. repec:pdc:jrnbeh:v:13:y:2017:i:3:p:383-408 is not listed on IDEAS
    14. Liangjie Zhao & Wenqi Duan, 2014. "Simulating the Evolution of Market Shares: The Effects of Customer Learning and Local Network Externalities," Computational Economics, Springer;Society for Computational Economics, vol. 43(1), pages 53-70, January.
    15. Corrocher, Nicoletta, 2006. "Internet adoption in Italian banks: An empirical investigation," Research Policy, Elsevier, vol. 35(4), pages 533-544, May.
    16. 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.
    17. 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.
    18. 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.
    19. 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.
    20. Jackie Krafft, 2003. "Vertical structure of the industry and competition: an analysis of the info-communications industry," Post-Print hal-00203652, HAL.
    21. Harry Bouwman & Mark de Reuver & Alex Visser, 2010. "Understanding Adoption of Mobile Service Bundles," Chapters,in: Promoting New Telecom Infrastructures, chapter 13 Edward Elgar Publishing.

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