Technology Adoption in Input-Output Networks

Xintong Han () and Lei Xu ()
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Xintong Han: Concordia University, https://www.concordia.ca/artsci/economics.html
Lei Xu: Toulouse School of Economics, https://www.tse-fr.eu/

No 19001, Working Papers from Concordia University, Department of Economics

Abstract: This paper investigates the role of network structure in technology adoption. In particular, we study how the network of individual agents can slow down the speed of adoption. We study this issue in the context of the Python programming language by modeling the decisions to adopt Python version 3 by software packages. Python 3 provides advanced features but is not backward compatible with Python 2, which implies adoption costs. Moreover, packages form an input-output network through dependency on other packages in order to avoid writing duplicate code, and they face additional adoption costs from dependencies without Python 3 support. We build a dynamic model of technology adoption that incorporates the input-output network. With a complete dataset of package characteristics for historical releases and user downloads, we draw the input-output network and develop a new estimation method based on the dependency relationship. Estimation results show the average cost of one incompatible dependency is one-third the fixed cost of updating a package’s code. Simulations show the input-output network contributes to 1.5 years of adoption inertia. We conduct counterfactual policies of promotion in subcommunities and find significant heterogeneous effects on the adoption rates due to differences in network structure. Length: 43 pages

Keywords: dynamic adoption; network dependency; structural estimation (search for similar items in EconPapers)
Date: 2019-01-22
New Economics Papers: this item is included in nep-com, nep-net and nep-pay
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