THE DIFFUSION OF SUCCESSIVE GENERATIONS OF A TECHNOLOGY - A MORE GENERAL-MODEL

In many cases of technological development, successive generations of a technology evolve, each more efficient than its predecessor. It has been assumed when modeling and forecasting the adoption of these techn ologies that the market reaction to each generation was similar. Using the terminology of the Bass model, this similarity is encapsulated in the assumption that the coefficients of innovation and imitation are constant. New data for two and three generations of mobile telephone t echnology from eleven countries are modeled. The modeling framework us ed-simultaneous estimation for successive generations using a full inf ormation maximum likelihood procedure-demonstrates that, in most cases , the hypothesis of constant coefficients can be rejected. Use of a mo del with changing coefficients is shown to considerably improve foreca sting performance. These results were reinforced by analysis of data f or four generations of IBM mainframes. (C) 1997 Elsevier Science Inc.