The Impact of the Speed of Innovation Arrival on the Innovation Adoption Timing: The Case of Two Generations of Future Innovations

摘要

The adoption behaviours and diffusion patterns of technology innovations are strongly influenced by expectations concerning the timing and significance of future improvements as well as the uncertainty of the technology progress. This paper realizes the concept of treating the adoption of technology innovations as a sequence of real options more completely by introducing the second generation of future innovations. The numerical illustrations show that while there is a significant turning point in the impact of the speed of technology progress when only one generation of future innovation is expected and it emerges over the sales recording period, the impact becomes much less non-monotonic or even monotonic when a further generation of improvements is expected. This confirms the intuitive and our previous empirical results.