Gartner's hype cycle: a simple explanation

In the ideal world, any innovation should be gradually accepted. It is natural that initially some people are reluctant to adopt a new largely un-tested idea, but as more and more evidence appears that this new idea works, we should see a gradual increase in number of adoptees -- until the idea becomes universally accepted. In real life, the adoption process is not that smooth. Usually, after the few first successes, the idea is over-hyped, it is adopted in situations way beyond the inventors' intent. In these remote areas, the new idea does not work well, so we have a natural push-back, when the idea is adopted to a much less extent than it is reasonable. Only after these wild oscillations, the idea is finally universally adopted. These oscillations are known as Gartner's hype cycle. A similar phenomenon is known in economics: when a new positive information about a stock appears, the stock price does not rise gradually: at first, it is somewhat over-hyped and over-priced, and only then, it moves back to a reasonable value. In this paper, we provide a simple explanation for this oscillation phenomenon.