Dynamics of Social Factors in Technological Substitutions

Dattee, Brice; Weil, Henry Birdseye

doi:10.2139/ssrn.904671

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Dynamics of Social Factors in Technological Substitutions

MIT Sloan Research Paper No. 4599-05

45 Pages Posted: 26 May 2006

See all articles by Brice Dattee

Brice Dattee

EMLYON Business School; Imperial College London - Entrepreneurship, Innovation, and Technology Management

Henry Birdseye Weil

Massachusetts Institute of Technology (MIT) - Sloan School of Management

Date Written: August 2005

Abstract

Diffusion models of technological innovations are often based on an epidemic structure which has a good fit to historical data but whose communication assumptions lack explanatory power. They assume a simplified decision process, uniform decision criteria across adopter categories, and a fully interconnected social structure. The objective of this paper is to show that the dynamics of social factors during technological substitutions have significant effects on substitution patterns. The success of a paradigmatic shift is not only a function of technological characteristics but also depends on change agents and many social dynamics. Such complexity requires analysis at several levels of granularity. We start with cognitive processes at the individual level using concepts from cognitive psychology and decision making under uncertainty and then move to interpersonal communications at the aggregate social level. We show that population heterogeneity generates different decision criteria and a social topology which greatly affect perceptions and the formation of expectations. The structure of interpersonal networks also explains how the relevance and credibility of information impacts the critical mass dynamics of technology adoption. A more complete model accounting for social interactions provides a useful framework for understanding complex substitution patterns and reducing the risk of misreading the market. Brice Dattée's research is funded by the National Institute of Technology Management in Ireland.

Keywords: technological innovations

Suggested Citation: Suggested Citation

Dattee, Brice and Weil, Henry Birdseye, Dynamics of Social Factors in Technological Substitutions (August 2005). MIT Sloan Research Paper No. 4599-05, Available at SSRN: https://ssrn.com/abstract=904671 or http://dx.doi.org/10.2139/ssrn.904671