LECTURE 14The Diffusion of The Diffusion of Innovations IIInnovations II

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Cumulative and Individual Adoption Patterns

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Assumptions of Simple Epidemic Models

Homophily Individuals or groups tend to hang out with

others who are similar to them (demographics, attitudes, etc)

N is usually constant

Speed of Diffusion usually constant

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Transmission versus Persuasion

The epidemic analogy begins to break down when we do not equate transmission with persuasion.

Persuasion may be influenced by several factors– e.g., risk, ‘trustworthiness’ of persuader.

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Accounting for Adoption Decisions Probit models

Various characteristics (xi) affects the profitability of adoption a new technology

5X*X*

Not Adopt

Adopt

“Relevant Characteristics”

Probit models depend on specifying relevant characteristics which might influence potential adoption.

Potential Relevant Characteristics (Geroski 2000) Firm Size as one of the most common– why? Suppliers Technological Expectations Costs

Learning costs Search Costs Switching Costs Opportunity Costs

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Another Possibility: Information Cascades (Geroski)

What about the innovations that do not successfully diffuse?

“Information Cascades” involve the process of early inertia, potential adopter investment, and the adoption ‘bandwagon’

Three phases: Initial choice Lock-in bandwagon

Photo: engadget.com

Rethinking ‘Classic’ Diffusion Models

Taking “the” new technology for granted

S-curves may not just be the starting point of an analysis of diffusion, but rather exist as one possible outcome.

The Network Approach: Valente (1996)

Two Network Approaches:

Relational Network Diffusion Direct ties among individuals

Opinion Leaders, personal and network density, in-ties versus out-ties

Structural Network Diffusion Considers the overall pattern

in the network Centrality, Number of

“weak” versus “strong” ties

Individuals’ contacts

adoption behavior

Pattern of network

individual positions and roles

Relational Networks

Relational: How do the direct ties affect adoption? In this case, ties could be “friendship”

Network relations and network density

Network relations and network density

Social Network Thresholds

Personal network thresholds (Valente 1996)

The number of members within personal network that must have adopted a given innovation before one will adopt

Accounts for some variation in overall adoption time

Opinion leaders have lower thresholds

Opinion leaders influence individuals with higher thresholds

Structural Network Diffusion

Weak Ties Revisited

Centrality

Structural Equivalence

Critiques of the Network Approach Other factors may be more important

than just the network structure: Example: Tetracycline diffusion (Coleman,

Katz et al. 1966) Marketing may have been most important

factor for explaining adoption.

Rationality of actors is not necessarily expressed– treated as a sort of “black box”

Overall, what does the diffusion of innovation research help us to understand?

Can be used at the micro-level to track individuals who are targeted members for an innovation

Can be used at the meso and macro-level to consider economic development, technological advances, or other processes.

Common Mistakes in Applying Diffusion Research

Treating diffusion only as dissemination or marketing

Confusing influence with status

Inadequate evaluation of the issue in its own context, as well as the surrounding social structure and perceptions of the innovation.

Current Research and Applications

Diffusion of Electronic Newspapers Li, S. S. (2003). Electronic newspaper and its adopters:

Examining the factors influencing the adoption of electronic newspapers in taiwan. Telematics and Informatics, 20(1), 35-49.

Diffusion of Internet Adoption Forman, C. (2005). The corporate digital divide:

Determinants of internet adoption. Management Science, 51(4), 641.

Diffusion of Wireless Applications Grantham, A., & Tsekouras, G. (2005). Diffusing wireless

applications in a mobile world. Technology in Society, 27(1), 85-104.

Grade Distribution

Assignment #1

Overall Assessment…

Grading Decoded…

Thinking About Assignment 2…

Finally, no reading response due next week