Multigeneration diffusion model for economic assessment of new technology

So Young Sohn, Byung Joo Ahn

Research output: Contribution to journalArticle

29 Citations (Scopus)

Abstract

In the era of 21st century, development of emerging information technology is the essence of the advancement. This kind of new technology, however, often requires a great deal of amount of initial investment for both procedures of R and D and commercialization. As cost invested in developing the specified technology is increasing, investors are paying more attention to cost to benefit analysis (CBA). One of the basic elements of CBA for new technological development is the diffusion pattern of demand of such technology. Typically, it would be hard to presume the diffusion pattern of demand when the new product or the technology is under development. In this case, a simulation study is necessary. Many studies of technology evaluation have adopted a single generation model to simulate the diffusion pattern of demand. This approach, however, considers the diffusion of the new technology itself, not taking into account newer generation, which can replace the one just invented. In the real market situation, one must consider the competition and substitution phenomena between old and new technologies. In this paper, we show how multigeneration technology diffusion model can be applied for more accurate CBA for information technology. Additionally, Monte Carlo simulation is performed to find influential factors on the CBA of a cybernetic building system (CBS).

Original languageEnglish
Pages (from-to)251-264
Number of pages14
JournalTechnological Forecasting and Social Change
Volume70
Issue number3
DOIs
Publication statusPublished - 2003 Mar 1

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Economic Models
Biomedical Technology Assessment
Technology
Economics
Cost-Benefit Analysis
Costs
Information technology
Cybernetics
Diffusion model
Substitution reactions
Benefit analysis

All Science Journal Classification (ASJC) codes

  • Business and International Management
  • Applied Psychology
  • Management of Technology and Innovation

Cite this

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Multigeneration diffusion model for economic assessment of new technology. / Sohn, So Young; Ahn, Byung Joo.

In: Technological Forecasting and Social Change, Vol. 70, No. 3, 01.03.2003, p. 251-264.

Research output: Contribution to journalArticle

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