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Technology Adoption in Input-Output Networks

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Abstract

This paper investigates the role of network structure in technology adoption. In particular, we study how the network of individual agents can slow down the speed of adoption. We study this issue in the context of the Python programming language by modeling the decisions to adopt Python version 3 by software packages. Python 3 provides advanced features but is not backward compatible with Python 2, which implies adoption costs. Moreover, packages form an input-output network through dependency on other packages in order to avoid writing duplicate code, and they face additional adoption costs from dependencies without Python 3 support. We build a dynamic model of technology adoption that incorporates the input-output network. With a complete dataset of package characteristics for historical releases and user downloads, we draw the input-output network and develop a new estimation method based on the dependency relationship. Estimation results show the average cost of one incompatible dependency is one-third the fixed cost of updating a package’s code. Simulations show the input-output network contributes to 1.5 years of adoption inertia. We conduct counterfactual policies of promotion in subcommunities and find significant heterogeneous effects on the adoption rates due to differences in network structure. Length: 43 pages

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  • Xintong Han & Lei Xu, 2019. "Technology Adoption in Input-Output Networks," Working Papers 19001, Concordia University, Department of Economics.
    • Handle: RePEc:crd:wpaper:19001
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    1. Xintong Han & Pu Zhao, 2019. "Pay for Content or Pay for Marketing? An Empirical Study on Content Pricing," Working Papers 19-03, NET Institute.

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    Keywords

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    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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