Template-type: ReDif-Paper 1.0
Author-Name: Windrum Paul
Author-Name: Birchenhall Chris
Author-workplace-name: MERIT
Title: Technological diffusion, welfare and growth: technological succession in the presence of network externalities
Abstract: The paper examines the conditions under which technological successions can occur in the presence ofnetwork externalities. A multi-agent model is developed in which the product designs offered by firmsco-evolve with consumer preferences. Firms compete though product innovation. The modelincorporates a modified genetic algorithm (GA) in which imitation is conducted via a process ofselective transfer (a one-way crossover) and internal R&D is conducted via selective mutation.Following an initial period in which old technology firms develop their designs and networkexternalities accrue, a technological shock occurs in which new technology-based firms enter themarket. The findings of the model indicate that a necessary condition for a technological successionare the existence of at least one consumer group that champions the new technology, developing newpreferences for its characteristics. Further, the introduction of novel characteristics are have a greaterbearing on the probability of a succession than incremental gains in characteristics offered by the oldtechnology. Third, the analysis identifies an inverse relationship between time the probability of atechnological succession.
Keywords: economics of technology ; 
Series: Research Memoranda
Creation-Date: 2002
Number: 038
File-URL: http://digitalarchive.maastrichtuniversity.nl/fedora/objects/guid:d486cfa3-ebae-44b5-8254-63dd21f2787f/datastreams/ASSET1/content
File-Format: application/pdf
File-Size: 245396
Handle: RePEc:unm:umamer:2002038