IDEAS home Printed from https://ideas.repec.org/p/ssa/lemwps/2017-15.html
   My bibliography  Save this paper

Dynamic Increasing Returns and Innovation Diffusion: bringing Polya Urn processes to the empirical data

Author

Listed:
  • Giovanni Dosi
  • Alessio Moneta
  • Elena Stepanova

Abstract

The patterns of innovation diffusion are well approximated by the logistic curves. This is the robust empirical fact confirmed by many studies in innovations dynamics. Here we show that the logistic pattern of innovation diffusion can be replicated by the time-dependent stochastic process with positive feedbacks along the diffusion trajectory. The dynamic increasing returns process is modeled by generalized Polya urns. So far, urn models have been mostly used to study the [path-dependent] limit properties. On the contrary, this work focuses on the transient [finite time] properties studying the conditions under which urn models capture the logistic trajectories which often track empirical diffusion process. As examples, we calibrate the process to match several cases of diffusion of motor ships in European countries.

Suggested Citation

  • Giovanni Dosi & Alessio Moneta & Elena Stepanova, 2017. "Dynamic Increasing Returns and Innovation Diffusion: bringing Polya Urn processes to the empirical data," LEM Papers Series 2017/15, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
  • Handle: RePEc:ssa:lemwps:2017/15
    as

    Download full text from publisher

    File URL: http://www.lem.sssup.it/WPLem/files/2017-15.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Diego Comin & Bart Hobijn & Emilie Rovito, 2006. "Five Facts You Need to Know About Technology Diffusion," NBER Working Papers 11928, National Bureau of Economic Research, Inc.
    2. Alessandro Nuvolari & Bart Verspagen & Nick von Tunzelmann, 2011. "The early diffusion of the steam engine in Britain, 1700–1800: a reappraisal," Cliometrica, Journal of Historical Economics and Econometric History, Association Française de Cliométrie (AFC), vol. 5(3), pages 291-321, October.
    3. Arthur, W Brian, 1989. "Competing Technologies, Increasing Returns, and Lock-In by Historical Events," Economic Journal, Royal Economic Society, vol. 99(394), pages 116-131, March.
    4. Dosi, Giovanni & Grazzi, Marco & Moschella, Daniele, 2015. "Technology and costs in international competitiveness: From countries and sectors to firms," Research Policy, Elsevier, vol. 44(10), pages 1795-1814.
    5. David, Paul A, 1985. "Clio and the Economics of QWERTY," American Economic Review, American Economic Association, vol. 75(2), pages 332-337, May.
    6. Bottazzi, Giulio & Secchi, Angelo, 2003. "A stochastic model of firm growth," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 324(1), pages 213-219.
    7. Davies, Stephen W., 1979. "Inter-firm diffusion of process innovations," European Economic Review, Elsevier, vol. 12(4), pages 299-317, October.
    8. Cowan, Robin, 1990. "Nuclear Power Reactors: A Study in Technological Lock-in," The Journal of Economic History, Cambridge University Press, vol. 50(3), pages 541-567, September.
    9. Brian Arthur, W. & Ermoliev, Yu. M. & Kaniovski, Yu. M., 1987. "Path-dependent processes and the emergence of macro-structure," European Journal of Operational Research, Elsevier, vol. 30(3), pages 294-303, June.
    10. Dosi, G & Kaniovski, Y, 1994. "On "Badly Behaved" Dynamics: Some Applications of Generalized Urn Schemes to Technological and Economic Change," Journal of Evolutionary Economics, Springer, vol. 4(2), pages 93-123, June.
    11. Windrum, Paul, 2004. "Leveraging technological externalities in complex technologies: Microsoft's exploitation of standards in the browser wars," Research Policy, Elsevier, vol. 33(3), pages 385-394, April.
    12. Dosi, Giovanni & Ermoliev, Yuri & Kaniovski, Yuri, 1994. "Generalized urn schemes and technological dynamics," Journal of Mathematical Economics, Elsevier, vol. 23(1), pages 1-19, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Francesco Lamperti & Giovanni Dosi & Mauro Napoletano & Andrea Roventini & Alessandro Sapio, 2018. "And then he wasn't a she : Climate change and green transitions in an agent-based integrated assessment model," Sciences Po publications 28, Sciences Po.
    2. Lamperti, F. & Dosi, G. & Napoletano, M. & Roventini, A. & Sapio, A., 2020. "Climate change and green transitions in an agent-based integrated assessment model," Technological Forecasting and Social Change, Elsevier, vol. 153(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Hötte, Kerstin, 2020. "How to accelerate green technology diffusion? Directed technological change in the presence of coevolving absorptive capacity," Energy Economics, Elsevier, vol. 85(C).
    2. Luigi Marengo & Paolo Zeppini, 2016. "The arrival of the new," Journal of Evolutionary Economics, Springer, vol. 26(1), pages 171-194, March.
    3. Tatsuhiro Shichijo & Emiko Fukuda, 2019. "A dynamic game analysis of Internet services with network externalities," Theory and Decision, Springer, vol. 86(3), pages 361-388, May.
    4. Heinrich, Torsten, 2016. "The Narrow and the Broad Approach to Evolutionary Modeling in Economics," MPRA Paper 75797, University Library of Munich, Germany.
    5. Marechal, Kevin, 2007. "The economics of climate change and the change of climate in economics," Energy Policy, Elsevier, vol. 35(10), pages 5181-5194, October.
    6. Dosi, Giovanni & Nelson, Richard R., 2010. "Technical Change and Industrial Dynamics as Evolutionary Processes," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 1, chapter 0, pages 51-127, Elsevier.
    7. Max Keilbach, 1999. "Network Externalities and the Path Dependence of Markets: Will Bill Gates Make It?," Computing in Economics and Finance 1999 711, Society for Computational Economics.
    8. Witt, Ulrich, 1997. ""Lock-in" vs. "critical masses" -- Industrial change under network externalities," International Journal of Industrial Organization, Elsevier, vol. 15(6), pages 753-773, October.
    9. Heinrich, Torsten, 2014. "Standard wars, tied standards, and network externality induced path dependence in the ICT sector," Technological Forecasting and Social Change, Elsevier, vol. 81(C), pages 309-320.
    10. Narduzzo, Alessandro & Warglien, Massimo, 1996. "Learning from the Experience of Others: An Experiment on Information Contagion," Industrial and Corporate Change, Oxford University Press, vol. 5(1), pages 113-126.
    11. Jean-Michel Dalle, 1995. "Dynamiques d'adoption, coordination et diversité : la diffusion des standards technologiques," Revue Économique, Programme National Persée, vol. 46(4), pages 1081-1098.
    12. Magrini, Marie-Benoit & Anton, Marc & Cholez, Célia & Corre-Hellou, Guenaelle & Duc, Gérard & Jeuffroy, Marie-Hélène & Meynard, Jean-Marc & Pelzer, Elise & Voisin, Anne-Sophie & Walrand, Stéphane, 2016. "Why are grain-legumes rarely present in cropping systems despite their environmental and nutritional benefits? Analyzing lock-in in the French agrifood system," Ecological Economics, Elsevier, vol. 126(C), pages 152-162.
    13. Harison, Elad & Koski, Heli, 2006. "Innovative Software Business Strategies: Evidence from Finnish Firms," Discussion Papers 1042, The Research Institute of the Finnish Economy.
    14. Silvano Cincotti & Wolfram Elsner & Nathalie Lazaric & Anastasia Nesvetailova & Engelbert Stockhammer, 2020. "Towards an evolutionary political economy. Editorial to the inaugural issue of the Review of Evolutionary Political Economy REPE," Review of Evolutionary Political Economy, Springer, vol. 1(1), pages 1-12, May.
    15. Schmidt, Tobias S. & Battke, Benedikt & Grosspietsch, David & Hoffmann, Volker H., 2016. "Do deployment policies pick technologies by (not) picking applications?—A simulation of investment decisions in technologies with multiple applications," Research Policy, Elsevier, vol. 45(10), pages 1965-1983.
    16. P.J. Lamberson & Scott E. Page, 2018. "First mover or higher quality? Optimal product strategy in markets with positive feedbacks," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 27(1), pages 40-52, March.
    17. Uwe Cantner & Simone Vannuccini, 2017. "Innovation and lock-in," Chapters, in: Harald Bathelt & Patrick Cohendet & Sebastian Henn & Laurent Simon (ed.), The Elgar Companion to Innovation and Knowledge Creation, chapter 11, pages 165-181, Edward Elgar Publishing.
    18. Zeppini, Paolo, 2015. "A discrete choice model of transitions to sustainable technologies," Journal of Economic Behavior & Organization, Elsevier, vol. 112(C), pages 187-203.
    19. Masiliūnas, Aidas, 2017. "Overcoming coordination failure in a critical mass game: Strategic motives and action disclosure," Journal of Economic Behavior & Organization, Elsevier, vol. 139(C), pages 214-251.
    20. A. Bassanini & G. Dosi, 1998. "Competing Technologies, International Diffusion and the Rate of Convergence to a Stable Market Structure," Working Papers ir98012, International Institute for Applied Systems Analysis.

    More about this item

    Keywords

    Polya urn schemes; Innovation diffusion; Logistic diffusion pattern; Dynamic increasing returns;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ssa:lemwps:2017/15. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (). General contact details of provider: https://edirc.repec.org/data/labssit.html .

    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 CitEc recognized a reference but did not link an item in RePEc 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.