Heterogeneity and the Dynamics of Technology Adoption

Stephen Ryan and Catherine Tucker

No 17253, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We estimate the demand for a videocalling technology in the presence of both network effects and heterogeneity. Using a unique dataset from a large multinational firm, we pose and estimate a fully dynamic model of technology adoption. We propose a novel identification strategy based on post-adoption technology usage to disentangle equilibrium beliefs concerning the evolution of the network from observed and unobserved heterogeneity in technology adoption costs and use benefits. We find that employees have significant heterogeneity in both adoption costs and network benefits, and have preferences for diverse networks. Using our estimates, we evaluate a number of counterfactual adoption policies, and find 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.

JEL-codes: C10 L10 O32 (search for similar items in EconPapers)
Date: 2011-07
New Economics Papers: this item is included in nep-net
Note: IO
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Citations: View citations in EconPapers (5)

Published as Stephen Ryan & Catherine Tucker, 2012. "Heterogeneity and the dynamics of technology adoption," Quantitative Marketing and Economics, Springer, vol. 10(1), pages 63-109, March.

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Related works:
Journal Article: Heterogeneity and the dynamics of technology adoption (2012)
Working Paper: Heterogeneity and the Dynamics of Technology Adoption (2006)
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