The association between technology type and diffusion pattern under duopolistic competition

Abstract

Many firms consider adopting new technologies as a means for enhancing competitive advantages. Therefore, the subject of technology diffusion has been studied by many researchers from different disciplines in order to explore the diffusion profiles throughout the industry or the country. The argument has frequently been made that the pattern of diffusion associated with most new technologies will typically have certain characteristics. In general, the diffusion pattern within an industry will depend on the competitive arena and technology characteristics. Based on a duopolistic game-theoretic model, this paper tries to explore the association between technology type and diffusion pattern. The results show that the cost-reducing technologies are adopted sequentially within a duopoly. On the other hard, strategic technologies diffuse over time or in a swarm. Although both technologies might be adopted sequentially, the rate for strategic technologies is faster than that for cost-reducing technologies. .