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LECTURE 15The Diffusion of The Diffusion of InnovationsInnovations
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What is Diffusion of Innovation?
“Diffusion is as much a process by which new technologies are developed as it is a process by which usage spreads….”
-Geroski, p.623
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Definition of Diffusion of Innovation
“the process by which an innovation is communicated through certain channels over time among the members of a social system” (Rogers 1983)
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Four Basic Concepts in Diffusion of Innovation
Innovation Idea, object, or practice that is
perceived as new
Channels of Communication Means by which info is transmitted to
or within the social system
Time Rate at which the innovation is diffused
or the relative speed with which it is adopted
Social System Individuals, organizations, or agencies
that are potential adopters of the innovation
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Common Scope of Diffusion Research
(1) Characteristics of an innovation which may influence its adoption
(2) Decision-making process that occurs when individuals consider adopting a new innovation
(3) The characteristics of individuals that make them likely to adopt the innovation
(4) The consequences for individuals and society of adopting the innovation
(5) Communication channels used in the adoption process (efficiency, speed of distribution, etc)
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Various Early Diffusion Studies
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InvestigatorInvestigator InnovationInnovation Social SystemSocial System
Rapoport (1978)Rapoport (1978) RadioisotopesRadioisotopes U.S. HospitalsU.S. Hospitals
Perry and Kraemer Perry and Kraemer (1978)(1978)
Computer Computer ApplicationsApplications
Local GovtLocal Govt
Pitcher et al. Pitcher et al. (1978)(1978)
Collective violenceCollective violence CountriesCountries
Oster (1982)Oster (1982) Basic oxygen Basic oxygen furnacefurnace
Steel Steel manufacturersmanufacturers
Adapted from Mahajan and Peterson (1985)
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Purpose of Diffusion Models
To depict the successive increase in the number of adopters over time.
Permits prediction of the continued development of the diffusion process.
Facilitates a theoretical explanation of the dynamics of the diffusion process.
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Who uses this stuff?
Marketers!
Movie studios
Political and Interest groups
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Foundations of Research on Diffusion of Innovations
Gabriel Tarde (1903)
Proposed the S-shaped curve
As it turned out, study after study tended to show the exact same S-shaped curve when researchers plot the rate of adoption over time.
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Diffusion “S” Curve
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Foundations of Research on Diffusion of Innovations
Ryan and Gross (1943) Categories of Adopters (relative
time of adoption)InnovatorsEarly adoptersEarly/Late MajoritiesLaggards
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Opinion Leadership
Opinion leaders are key for influence and thus ability to successfully diffuse an innovation.
Opinion leaders are concentrated among the early adopters, not the innovators.
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Adopter Categories
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Stages of Adoption
Everett Rogers (1995) Awareness Interest Evaluation Trial Adoption
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Categorizing Adopters and Non-Adopters
Adoption: accept and use
innovation
Nonadoption: nontrial of an innovation
Discontinuance: rejection of an
innovation after it has previously been adopted
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Dvorak/QWERTY/Beta/VHS/Dos/Mac/grrrrr???
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Epidemic Models
Based on simple examination of “spread” Simplest version is basic exponential model Central-source model
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N of users
Time
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Epidemic Models (continued) Modified spread model
Diffusion works through word-of-mouth (i.e., previous users)
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N of users
Time
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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 situation gets complicated when we do not equate transmission with persuasion.
Persuasion may be influenced by several factors– e.g., risk, ‘trustworthiness’ of persuader.
As Rogers points out, this complexity is part of the reason that the S-shaped curve is rarely symmetric
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Accounting for Adoption Decisions Probit models
Various characteristics (xi) affects the profitability of adoption a new technology
22X*X*
Not Adopt
Adopt
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“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
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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.