Models of technology diffusion

The literature on new technology diffusion is vast, and it spills over many conventional disciplinary boundaries. This paper surveys the literature by focusing on alternative explanations of the dominant stylized fact: that t he usage of new technologies over time typically follows an S-curve. The mo st commonly found model which is used to account for this model is the so-c alled epidemic model, which builds on the premise that what limits the spee d of usage is the lack of information available about the new technology, h ow to use it and what it does. The leading alternate model is often called the probit model, which follows from the premise that different firms, with different goals and abilities, are likely to want to adopt the new technol ogy at different times. In this model, diffusion occurs as firms of differe nt types gradually adopt it. There are actually many ways to generate an S- curve, and the third class of models which we examine are models of density dependence popularized by population ecologists. In these models, the twin forces of legitimation and competition help to establish new technologies and then ultimately limit their take-up. Finally, we look at models in whic h the initial choice between different variants of the new technology affec t the subsequent diffusion speed of the chosen technology. Such models ofte n rely on information cascades, which drive herd like adoption behaviour wh en a particular variant is finally selected. (C) 2000 Elsevier Science B.V. All rights reserved.