Diffusion of Innovation

Theories, models, and future directions

Innovation Diffusion Models

1. 2. 3. 4. 5. 6. 7. General vs. Domain specific Conceptual vs. Mathematical Focus on innovation vs. adopters Organizational vs. Individual Process vs. Outcome Proximity vs. Network Rate-oriented vs. Threshold

Original Theorists
Gabriel Tarde (1903)
S-shaped curve for diffusion processes

Ryan and Gross (1943): adopter categories

Innovators Early adopters Early/Late Majorities Laggards

Original Theorists
Katz (1957) :
media opinion leaders opinion followers

Everett M. Rogers
Diffusion of Innovations (1962-95)

the process by which an innovation is communicated through certain channels over time among the members of a social system

Rogers (1995) Diffusion of Innovation

Stages of adoption:
Awareness - the individual is exposed to the innovation but lacks complete information about it

Interest - the individual becomes interested in the new idea and seeks additional information about it
Evaluation - individual mentally applies the innovation to his present and anticipated future situation, and then decides whether or not to try it Trial - the individual makes full use of the innovation

More Theorists
Hagerstrand (1965) studied diffusion of hybrid corn in farmers. Model based on proximity.
Bass (1969) developed differential equations borrowed from physics to model diffusion of innovation

More Theorists
Midgley & Dowling (1978):
Contingency model.

Mahajan & Peterson (1985):

Extension and simplification of Bass model (has 2 parameters, internal & external influence)

Abrahamson & Rosenkopf (1990):

Bandwagons & Thresholds
Rational efficiency vs. Fad theories
Rational Efficiency: The more organizations adopt an innovation, the more knowledge about the innovations true efficiency is disseminated Fad theories: The sheer number of adopters creates bandwagon pressures
Institutional pressures: Adoption of innovation can become a social norm Competitive pressures: Fear that not adopting will lead to loss of competitive advantage

Valente (1996)
Social network thresholds
Personal network thresholds: number of
members within personal network that must have adopted before one will adopt Accounts for some variation in overall adoption time

Opinion leaders have lower thresholds and influence individuals with higher thresholds

Factors affecting diffusion

Innovation characteristics
Individual characteristics Social network characteristics Others

Innovation characteristics
Observability
The degree to which the results of an innovation are visible to potential adopters

Relative Advantage
The degree to which the innovation is perceived to be superior to current practice

Compatibility
The degree to which the innovation is perceived to be consistent with socio-cultural values, previous ideas, and/or perceived needs

Trialability
The degree to which the innovation can be experienced on a limited basis

Complexity
The degree to which an innovation is difficult to use or understand.

Individual characteristics
Innovativeness
Originally defined by Rogers: the degree to which
an individual is relatively earlier in adopting an innovation than other members of his social system

Modified & extended by Hirschman (1980):

Inherent / actualized novelty seeking Creative consumer Adoptive / vicarious innovativeness

Other individual characteristics

Reliance on others as source of information (Midgley & Dowling) Adopter threshold (e.g. Valente) Need-for-change / Need-for-cognition (Wood & Swait, 2002)

Network characteristics
Opinion leadership: number of nominations as source of information Number of contacts within each adopter category (Valente)

Complex structure

Other possible factors:

Lyytinen & Damsgaard (2001)
Social environment of diffusion of innovation Marketing strategies employed Institutional structures (e.g., government)

Cellular Automata & Diffusion of Innovation

Boccara & Fuks (1998)
CA model of diffusion based on contact theory.
(Not heavily based in innovation diffusion theory)

Strang & Macy (2001)

Used decision rule: if current practice is unsatisfactory, evaluate best practices. Fadlike behavior emerged

Cellular Automata & Diffusion of Innovation

Goldenberg, Libai, & Muller (working paper)
Used CA to model Bass parameters in individuals and observed aggregate-level behavior (no focus on fad-like behavior)