Innovation, Diversity and Diffusion: A Self-Organisation Model

A number of features of innovation diffusion are identified: appropriability, diversity, expectations, selection, learning, and spillover externalities. A dynamic model is formul ated to embed the diffusion question into a more general framework of disequilibrium competition. The model incorporates distinct vintage structures reflecting a change in technological trajectory, learning-by-using, a nd expectations-driven investment rules of thumb. Simulation studies reveal robust quasi-logistic curves, but a complicated pattern of net market share gains and losses. Uncertainty regarding the rationality of early or late adoption, it is argued, ensures that the requisite behavioral variety is present to generate these diffusion patterns. Copyright 1988 by Royal Economic Society.