Strategic Technology Adoption Under Dispersed Information and Information Learning

Tetsuya Kasahara ()
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Tetsuya Kasahara: Faculty of Ecnomics, Niigata University, 8050 Ikarashi 2-no-cho Nishi-ku, Niigata 950-2181, Japan

International Journal of Innovation and Technology Management (IJITM), 2015, vol. 12, issue 06, 1-18

Abstract: In this paper, we analyze the technology adoption problem of firms when relevant information about a new technology is dispersed among them. Developing a continuous time model in which imperfectly and differently informed multiple firms determine strategically when to adopt a new technology, we show that the phenomena of an economically inefficient initial delay of adoption, a staggered adoption, and an inefficiently early mass adoption can arise in equilibrium, particularly in the form of strategic delay, informational learning, and herding behavior, respectively. We also address the incentive scheme that helps to achieve efficient collective adoption of the new technology under dispersed information and show under what conditions, if any, such an incentive scheme can work well.

Keywords: Technology adoption; informational externality; learning; strategic delay; herding (search for similar items in EconPapers)
Date: 2015
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DOI: 10.1142/S0219877015500285

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