Fast and expensive: the diffusion of a disappointing innovation

Abstract Firms seek to imitate innovations that yield competitive advantage, but imitation can presage disappointment when the innovation value is below expectations. Empirical research has only rarely examined the diffusion of such disappointing innovations, and it is not known whether negative information from past adopters will halt the diffusion process. Likewise, the effect of heterogeneity in the innovation value on its spread has not been systematically investigated. Here, a unique dataset on a disappointing innovation is used to examine how adoption decisions are imitated, but actual use and subsequent abandonment can yield information that reduces the likelihood that others will adopt. The findings show imitation of the adoptions of other firms, but avoidance of the innovation once these firms start using the innovation or abandon it. Copyright © 2011 John Wiley & Sons, Ltd.