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http://hdl.handle.net/2451/28474
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| Title: | Heterogeneity and the Dynamics of Technology Adoption |
| Authors: | Ryan, Stephen - MIT & NBER
Tucker, Catherine - MIT Sloan School of Business |
| Issue Date: | 2006 |
| Series/Report no.: | NET Institute Working Paper;06-26 |
| Abstract: | This paper analyzes the role of heterogeneity and forward-looking
expectations in the diffusion of network technologies. Using a detailed
dataset on the adoption of a new videoconferencing technology within a
firm, we estimate a structural model of technology adoption and
communications choice. We allow for heterogeneity in network benefits
and adoption costs across agents. We find that ignoring heterogeneity in
the interplay between adoption costs and network effects will
underpredict the size of the steady-state network size by almost 50
percent. We develop a new 'simulated sequence estimator' to measure the
extent to which agents seek diversity in their calling behavior, and
characterize the patterns of communication as a function of geography,
job function, and rank within the firm. We find that agents have
significant welfare gains from having access to a diverse network, and
that a policy of strategically targeting the right subtype for initial
adoption can lead to a faster-growing and larger network than a policy
of uncoordinated or diffuse adoption. |
| URI: | http://hdl.handle.net/2451/28474 |
| Appears in Collections: | NET Institute Working Papers Series
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