Modeling the Dynamics of Network Technology Adoption and the Role of Converters

New network technologies constantly seek to displace incumbents. Their success depends on technological superiority, the size of the incumbent's installed base, users' adoption behaviors, and various other factors. The goal of this paper is to develop an understanding of competition betwee...

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Bibliographic Details
Published in:IEEE/ACM transactions on networking 2010-12, Vol.18 (6), p.1793-1805
Main Authors: Soumya Sen, Youngmi Jin, Guérin, Roch, Hosanagar, Kartik
Format: Article
Language:English
Subjects:
Consumer electronics
Convergence
Converters
Cost function
Degradation
diffusion
Displacement
dynamics
Economics
equilibrium
externality
Internet
Interoperability
IP networks
Market penetration
Markets
Mathematical models
Networks
Paper technology
Robustness
Studies
Systems engineering and theory
Technology adoption
Testing
Utilities
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Summary:New network technologies constantly seek to displace incumbents. Their success depends on technological superiority, the size of the incumbent's installed base, users' adoption behaviors, and various other factors. The goal of this paper is to develop an understanding of competition between network technologies and identify the extent to which different factors, in particular converters (a.k.a. gateways), affect the outcome. Converters can help entrants overcome the influence of the incumbent's installed base by enabling cross-technology interoperability. However, they have development, deployment, and operations costs and can introduce performance degradations and functionality limitations, so that if, when, why, and how they help is often unclear. To this end, the paper proposes and solves a model for adoption of competing network technologies by individual users. The model incorporates a simple utility function that captures key aspects of users' adoption decisions. Its solution reveals a number of interesting and at times unexpected behaviors, including the possibility for converters to reduce overall market penetration of the technologies and to prevent convergence to a stable state, something that never arises in their absence. The findings were tested for robustness, e.g., different utility functions and adoption models, and found to remain valid across a broad range of scenarios.
ISSN:1063-6692
1558-2566
DOI:10.1109/TNET.2010.2048923