Seeding the S-Curve? The Role of Early Adopters in Diffusion

Christian Catalini and Catherine Tucker

No 16-02, Working Papers from NET Institute

Abstract: In October 2014, all 4,494 undergraduates at the Massachusetts Institute of Technology were given access to Bitcoin, a decentralized digital currency. As a unique feature of the experiment, students who would generally adopt first were placed in a situation where many of their peers received access to the technology before them, and they then had to decide whether to continue to invest in this digital currency or exit. Our results suggest that when natural early adopters are delayed relative to their peers, they are more likely to reject the technology. We present further evidence that this appears to be driven by identity, in that the effect occurs in situations where natural early adopters' delay relative to others is most visible, and in settings where the natural early adopters would have been somewhat unique in their tech-savvy status. We then show not only that natural early adopters are more likely to reject the technology if they are delayed, but that this rejection generates spillovers on adoption by their peers who are not natural early adopters. This suggests that small changes in the initial availability of a technology have a lasting effect on its potential: Seeding a technology while ignoring early adopters' needs for distinctiveness is counterproductive.

Keywords: early adopters; diffusion; adoption; bitcoin; blockchain; digital currencies; MIT; spillover effects (search for similar items in EconPapers)
JEL-codes: D83 G29 L14 M13 M3 O31 O32 O33 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2016-09
New Economics Papers: this item is included in nep-pay
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Working Paper: Seeding the S-Curve? The Role of Early Adopters in Diffusion (2016)
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