LECTURE 16 The Diffusion of Innovations II 1

Papers and Life After Spring Break  Important things:  Assignment #2  Research Papers  NCAA Basketball Tournament

Information Cascades “Information Cascades” involve the process of early inertia, potential adopter investment, and the adoption ‘bandwagon’ Initial choice Lock-in bandwagon

Diffusion and Collective Behavior (Valente)  Decision-making under conditions of uncertainty and risk (diffusion processes)  Perceptions of normative behavior (collective behavior) “In collective behavior, risk is usually considerably lower because the consequences of engaging in the behavior are considerably less. Collective behavior does not usually demand an outlay of money, for example.”

Thresholds and Critical Mass  Threshold: the proportion of a group needed to engage in a behavior before a given individual is willing to do so.  Critical Mass: the proportion of a group needed to engage in a behavior before it is deemed ‘successful’

Key Application: Interactive Communication Technologies  Sequential Interdependence  The effect of early adopters reducing uncertainty, price, etc on later adopters  Reciprocal Interdependence (Markus 1987)  Incentive increases with adoption  Effect of later adopters on early adopters Decreases likelihood of discontinuance

The Network Approach: Valente (1996)  Two Network Approaches:  Relational Network Diffusion Direct ties among individuals Opinion Leaders, personal and network density, in-ties versus out- ties  Structural Network Diffusion Considers the overall pattern in the network Centrality, Number of “weak” versus “strong” ties Individuals’ contacts adoption behavior Pattern of network individual positions and roles

Relational Networks Relational: How do the direct ties affect adoption? In this case, ties could be “friendship”

Network relations and network density

Social Network Thresholds  Personal network thresholds (Valente 1996) Accounts for some variation in overall adoption time Opinion leaders have lower thresholds Opinion leaders influence individuals with higher thresholds Personal Network Density Dense vs. Radial Personal Network Exposure

Structural Network Diffusion  Weak Ties Revisited  Centrality  Structural Equivalence

Critiques of the Network Approach  Other factors may be more important than just the network structure:  Example: Tetracycline diffusion (Coleman, Katz et al. 1966) Marketing may have been most important factor for explaining adoption.  Rationality of actors is not necessarily expressed– treated as a sort of “black box”

Overall, what does the diffusion of innovation research help us to understand?  Can be used at the micro-level to track individuals who are targeted members for an innovation  Can be used at the meso and macro-level to consider economic development, technological advances, or other processes.

Common Mistakes in Applying Diffusion Research  Treating diffusion only as dissemination or marketing  Confusing influence with status  Inadequate evaluation of the issue in its own context, as well as the surrounding social structure and perceptions of the innovation.

Current Research and Applications  Diffusion of Electronic Newspapers  Li, S. S. (2003). Electronic newspaper and its adopters: Examining the factors influencing the adoption of electronic newspapers in taiwan. Telematics and Informatics, 20(1),  Diffusion of Internet Adoption  Forman, C. (2005). The corporate digital divide: Determinants of internet adoption. Management Science, 51(4), 641.  Diffusion of Wireless Applications  Grantham, A., & Tsekouras, G. (2005). Diffusing wireless applications in a mobile world. Technology in Society, 27(1),

Assignment 2  Tasks:  A bit of literature search, summary  Statement of one or more argument(s)  Justification for argument(s)  Rough outline formulating the approach you will take  One short essay that allows you to draw from readings in the 2 nd half of course  Will be posted tonight