Demographic processes in a model of innovation diffusion with dynamic market

In this paper we study a binomial innovation diffusion model for a variable size market by modelling the demographic process of entrance-exit from each market compartment. We examine from a theoretical point of view the effect of the simultaneous presence of economic and demographic parameters under the exponential market growth hypothesis, by presenting some general results on the adoptions and sales time path. We also enlighten the relevance of considering these variables in relative terms and show how, in presence of a dynamic, the diffusion process never saturates the market. Finally, we test our model on a data set for cellular phones market in different countries.     

Forecasting technology diffusion: a new generalisation of the logistic model

The present research proposes a new generalisation of the logistic model aiming at technology diffusion forecasting. Regarding criticisms and failures reported in the literature to apply logistic function for long-term forecasting, in our work we focused on short-term accuracy of forecast. To formulate the model, based on mathematical approximation, at first the differential equation governing the diffusion process is found and then by solving the derived differential equation, the forecast function is obtained. In all steps, mathematical tools from numerical analysis are used. We compared the New Generalized Logistic Model with eight of the most renowned models in the literature. The model led to more accurate fits and forecasts than those obtained from other models we applied for comparison.     

Analysis on the growth of telecommunication services: a global comparison of diffusion patterns

With the development of the Internet, the telecommunication market has seen a rapid shift from voice-based services to data-based services. Relationships of substitutability and complementarity have emerged among communications technology services such as Internet service, mobile phone service and fixed telephone service. The article analyses the diffusion patterns of communication services in different continents. A modified logistic growth model is estimated using panel data for the years 1975–2004. The research forms a valuable framework for forecasting demand for new services based on the diffusion of incumbent services and can inform strategies for entering the communications network industry.     

The late take-off phenomenon in the diffusion of telecommunication services: network effect and the critical mass

Telecommunication services are distinctive in that their adoptions are influenced by network effect resulting in the late take-off phenomenon and the critical mass problem. In this paper we examined the late take-off phenomenon in the diffusion process of telecommunication services. We first compared the parameters of the diffusion process of consumer durables with those of fax services in the US and Korea. By analyzing the parameters of a new diffusion model based on the threshold model proposed by Markus, we found that the late take-off phenomenon resulted from the low heterogeneity of the threshold distribution for the potential adopters. A simulation approach was proposed for the theoretical implication of the critical mass problem in the start-up telecommunications services.     

The dynamic evolution and technological diffusion in Taiwan's TFT-LCD industrial cluster: a network perspective

Industrial clusters evolve dynamically as the external environment changes. To better understand the nature of cluster evolution, which has nurtured economic growth in early 2000s, strategy and organisation scholars have attempted to unpack contributors to cluster evolution from the perspective of the ‘environmental uncertainty’ and ‘resource abundance’ effects. The paper adopts and extend an earlier extant model through empirical testing of the thin-film transistor liquid crystal display (TFT-LCD) industrial cluster in Taiwan, a developing country. This study modifies the extant network model by adding a diffusion of technological innovation index to cluster evolving. Using the extended case study, the study examines the dynamic evolutionary process in the TFT-LCD industrial cluster. It was found that the evolution of the TFT-LCD industrial cluster resembles the theoretical argument in some respects. The characteristics of network change are modified according to these results. Implication for policymakers and decision-makers of developing countries are also discussed.     

A dynamic diffusion model for managing customer's expectation and satisfaction

The paper aims at answering the generic question on how suppliers make the suitable and well-timed decisions in diffusing new technology effectively to adopters. Three major attempts are made for the study: First, investigating the entire process of the adoption and diffusion of technology innovation with reasonably well-accepted models in each areas. Second, proposing an integrated model by concatenating in structured manner the three prominent models for the management of technology innovation such as diffusion model, adoption model, and customer satisfaction model. Third, exploring the dynamic mechanism underlying outward behaviors of the integrated model proposed in the study which depicts the causal relationships that influence technology adoption and diffusion behaviors. An exploration of the dynamic mechanism underlying outward behaviors of the integrated model is presented in the study by introducing the system dynamics simulation technique. These attempts made for the study and the results perhaps allow both researchers and practitioners to gain insight into the causal factors influencing customers' adoption decision making processes and thereby into the potential diffusion patterns resulting from those adoption processes.     

电信服务业:山雨欲来风满楼

伴随着改革开放的发展1980年以前，我国电信业由政府部门直接垄断经营，国家对电话资费实施严格管制，电信业基本不赢利甚至亏损，电信基础设施及服务短缺。改革开放后，政府开始实施电信管理体制改革并放松价格管制，实行中央和地方双重领导、允许邮电部门征收电话初装费等措施。这些政策促进了电信业的迅速发展。1979年—1995年，全国邮电通信固定资产投资达2700亿元（其中约1/3来自电话初装费）。电信业的真正改革是在1994年成立中国联通公司，打破了原中国电信长期独家垄断国内电信市场的局面。电信市场的发展、开放和变革大致经历了以…     

The value of money in a dynamic equilibrium model

Summary. This paper studies the pricing of money in an infinite-horizon economy with heterogeneous agents, incomplete financial markets and arbitrary borrowing restrictions. Purchases of the consumption good are subject to a cash-in-advance constraint. Under general conditions I show that the price of money is equal to its fundamental value, where this value is defined over all state-price processes that are compatible with the existence of no-arbitrage opportunities. This equality implies that the cash-in-advance constraint is binding infinitely often for all agents in the economy. The analysis highlights certain differences in the determination of the price of money with respect to models with money in the utility function that bear on the optimal implementation of economic policies.Received: 23 October 2003, Revised: 26 August 2004 JEL Classification Numbers: D52, E44, G12.M.S. Santos: This paper is an outgrowth of an earlier collaboration with Michael Woodford. I have also benefitted from various discussions with Eduardo Gimenez, Alejandro Hernandez, and Miguel Iraola. Some very useful comments by an anonymous referee are greatly appreciated.     

Multigeneration diffusion model for economic assessment of new technology

In the era of 21st century, development of emerging information technology is the essence of the advancement. This kind of new technology, however, often requires a great deal of amount of initial investment for both procedures of R&D and commercialization. As cost invested in developing the specified technology is increasing, investors are paying more attention to cost to benefit analysis (CBA). One of the basic elements of CBA for new technological development is the diffusion pattern of demand of such technology. Typically, it would be hard to presume the diffusion pattern of demand when the new product or the technology is under development. In this case, a simulation study is necessary. Many studies of technology evaluation have adopted a single generation model to simulate the diffusion pattern of demand. This approach, however, considers the diffusion of the new technology itself, not taking into account newer generation, which can replace the one just invented. In the real market situation, one must consider the competition and substitution phenomena between old and new technologies. In this paper, we show how multigeneration technology diffusion model can be applied for more accurate CBA for information technology. Additionally, Monte Carlo simulation is performed to find influential factors on the CBA of a cybernetic building system (CBS).     

The diffusion of successive generations of a technology: A more general model

In many cases of technological development, successive generations of a technology evolve, each more efficient than its predecessor. It has been assumed when modeling and forecasting the adoption of these technologies that the market reaction to each generation was similar. Using the terminology of the Bass model, this similarity is encapsulated in the assumption that the coefficients of innovation and imitation are constant. New data for two and three generations of mobile telephone technology from eleven countries are modeled. The modeling framework used—simultaneous estimation for successive generations using a full information maximum likelihood procedure—demonstrates that, in most cases, the hypothesis of constant coefficients can be rejected. Use of a model with changing coefficients is shown to considerably improve forecasting performance. These results were reinforced by analysis of data for four generations of IBM mainframes.     

Minorities and majorities: a dynamic model of assimilation

Abstract.  The paper analyses the population dynamics of a country that has two ethnic groups, a minority and a majority, and minority members can choose to assimilate into the majority. Depending on the minority's size, the long‐run outcome can be full or no assimilation. Under certain parameter values multiple equilibria exist, including the two extreme cases. The paper demonstrates that both the long‐run outcome and the equilibrium path may be inefficient. Two extensions to the basic model are considered. The first one allows for a comparison between a multicultural and a 'melting pot' society. The second one introduces population growth and studies the interplay between exogenous and endogenous changes in the minority's size. JEL classification: J110, J150, J180     

Price and quantity adjustment in a dynamic closed model: The dual stability theorem

The paper analyzes dual instability in a dynamic input-output framework. It is divided into three parts: the first gives an informal introduction, the second discusses the similarity with the knife edge, and the last suggests a new interpretation, which guarantees nonnegative solutions and relative stability. It has been assumed that the producers adjust their prices following an adaptive expectation mechanism, and the current level of investment to the expected value defined by a golden rule approach.     

Brand price differentials in retail distribution: product quality and service quality

A theoretical model is proposed to disentangle the contribution of brand quality and retailer service quality in explaining brand price differentials across retailers. Two testable hypotheses emerge: (i) for each brand type, price differences across retailers are independent of brand quality differentials and (ii) at a given retailer, price differences between different brand qualities are independent of service quality differentials. Our empirical analysis, for a sample of the U.K. grocery retailer prices, discloses that retailers that offer higher service quality sell same quality brands at higher prices. In particular, service quality premia amount to 6% for national brands and are in the range of 9–15% for low-quality store brands. Besides, at a given retailer, the price premia paid for the national brand are very large: around 150% between national brands and low-quality store brands, and around 40% between national brands and high-quality store brands. Also, the price differential between the national brand and the low-quality store brand does not increase with service quality.     

The international diffusion of new technology

An analysis of the factors influencing the international diffusion of new technology is presented. As a result of the analysis, a model of the international diffusion process is proposed and tested statistically using diffusion data for two major innovations in the Steel Industry.     

The dynamic of innovation networks: a switching model on technological change

In this paper, we introduce an agent-based model where heterogeneous firms compare and modify their innovation strategies, so generating an evolving network structure. By implementing dynamic behavioral switching via a fitness mechanism based on agents’ performance, companies can endogenously modify their tactics for technological change and switch among three groups: stand-alone innovators, collaborative innovators and imitators. On the one hand, we study the properties of the emerging networks and we show that they reproduce the stylized facts of innovation networks. Moreover, we focus the analysis on the impact of these three innovation categories on the macro economic aggregate, finding that collaborative companies are those having the highest positive impact on the economic system. On the other hand, we use the model to study the effect of different economic innovation policies in increasing macroeconomic performance.     

A percolation model of eco-innovation diffusion: The relationship between diffusion, learning economies and subsidies

An obstacle to the widespread adoption of environmentally friendly energy technologies such as stationary and mobile fuel cells is their high upfront costs. While much lower prices seem to be attainable in the future due to learning curve cost reductions that increase rapidly with the scale of diffusion of the technology, there is a chicken and egg problem, even when some consumers may be willing to pay more for green technologies. Drawing on recent percolation models of diffusion, we develop a network model of new technology diffusion that combines contagion among consumers with heterogeneity of agent characteristics. Agents adopt when the price falls below their random reservation price drawn from a lognormal distribution, but only when one of their neighbors has already adopted. Combining with a learning curve for the price as a function of the cumulative number of adopters, this may lead to delayed adoption for a certain range of initial conditions. Using agent-based simulations we explore when a limited subsidy policy can trigger diffusion that would otherwise not happen. The introduction of a subsidy policy seems to be highly effective for a given high initial price level only for learning economies in a certain range. Outside this range, the diffusion of a new technology either never takes off despite the subsidies, or the subsidies are unnecessary. Perhaps not coincidentally, this range seems to correspond to the values observed for many successful innovations.     

The effect of short sale constraints on analyst forecast quality: Evidence from a natural experiment in China

We examine the effect of short selling on analyst forecast quality following the pilot program in China in 2010 that allows short selling for selected companies. We find that reduction in short sale constraints significantly improves analyst forecast quality for these pilot-firms when compared to non-pilot firms. Specifically, analyst forecast errors for pilot firms are smaller and forecast dispersions are narrower. Further, we show that the improvement of analyst forecast quality is more prominent for firms with lower prior price efficiencies and disclosure quality, and in locations with lower institutional development. Our findings suggest that short selling activities serve an important role in facilitating the speed of information incorporation and improving the information environment faced by firms.     

The dynamic effectiveness of monetary policy in China: evidence from a TVP-SV-FAVAR model

We use a broad set of China’s macroeconomic indicators and a dynamic factor model to estimate latent factors of economic output and inflation, which are used to measure the ultimate objectives of monetary policy. The above factors and policy variables are incorporated into a TVP-SV-FAVAR model to investigate the dynamic effectiveness of Chinese monetary policy. Our results confirm that the effects of Chinese monetary policy are time-varying. By comparing the quantity rule with the price rule, we find that the price rule is more effective in managing China’s macro-economy, especially after the financial crisis. Moreover, the results can be regarded as a division of policy rules in a way that different rules are directed at different objectives.     

Knowledge, hierarchy and the selection of routines: an interpretative model with group interactions

The aim of this paper is to analyze the selection of routines inside an organizational structure characterized by different cognitive representations and facing hierarchical pressure leading to either truce or conflict. After a brief discussion of the role of hierarchy and the related problems of organizational practice selection in the evolutionary literature, we model the interactions between different groups within a firm trying to interfere with its coordination mechanisms in order to support their own practices. Numerical simulations highlight the different learning abilities present in various organizational set-ups and their related knowledge distribution. It is shown that networking designs are the most profitable organizational configurations because of their dynamics of learning, though they are very sensitive to the truce problem.JEL Classification: L14, L20, L22, B52, D83Correspondence to: Nathalie Lazaric