Heterogeneity and the Dynamics of Technology Adoption / Stephen P. Ryan, Catherine Tucker.

Format:

Book

Author/Creator:

Ryan, Stephen P.

Contributor:

National Bureau of Economic Research.

Tucker, Catherine.

Series:

Working Paper Series (National Bureau of Economic Research) no. w17253.

NBER working paper series no. w17253

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2011.

Summary:

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.

Notes:

Print version record

July 2011.