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Dynamics of Technology Adoption in Markets Exhibiting Network Effects

  • Hur, Won-Chang
    • Asia pacific journal of information systems
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    • 제20권1호
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    • pp.127-140
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    • 2010
  • The benefit that a consumer derives from the use of a good often depends on the number of other consumers purchasing the same goods or other compatible items. This property, which is known as network externality, is significant in many IT related industries. Over the past few decades, network externalities have been recognized in the context of physical networks such as the telephone and railroad industries. Today, as many products are provided as a form of system that consists of compatible components, the appreciation of network externality is becoming increasingly important. Network externalities have been extensively studied among economists who have been seeking to explain new phenomena resulting from rapid advancements in ICT (Information and Communication Technology). As a result of these efforts, a new body of theories for 'New Economy' has been proposed. The theoretical bottom-line argument of such theories is that technologies subject to network effects exhibit multiple equilibriums and will finally lock into a monopoly with one standard cornering the entire market. They emphasize that such "tippiness" is a typical characteristic in such networked markets, describing that multiple incompatible technologies rarely coexist and that the switch to a single, leading standard occurs suddenly. Moreover, it is argued that this standardization process is path dependent, and the ultimate outcome is unpredictable. With incomplete information about other actors' preferences, there can be excess inertia, as consumers only moderately favor the change, and hence are themselves insufficiently motivated to start the bandwagon rolling, but would get on it once it did start to roll. This startup problem can prevent the adoption of any standard at all, even if it is preferred by everyone. Conversely, excess momentum is another possible outcome, for example, if a sponsoring firm uses low prices during early periods of diffusion. The aim of this paper is to analyze the dynamics of the adoption process in markets exhibiting network effects by focusing on two factors; switching and agent heterogeneity. Switching is an important factor that should be considered in analyzing the adoption process. An agent's switching invokes switching by other adopters, which brings about a positive feedback process that can significantly complicate the adoption process. Agent heterogeneity also plays a important role in shaping the early development of the adoption process, which has a significant impact on the later development of the process. The effects of these two factors are analyzed by developing an agent-based simulation model. ABM is a computer-based simulation methodology that can offer many advantages over traditional analytical approaches. The model is designed such that agents have diverse preferences regarding technology and are allowed to switch their previous choice. The simulation results showed that the adoption processes in a market exhibiting networks effects are significantly affected by the distribution of agents and the occurrence of switching. In particular, it is found that both weak heterogeneity and strong network effects cause agents to start to switch early and this plays a role of expediting the emergence of 'lock-in.' When network effects are strong, agents are easily affected by changes in early market shares. This causes agents to switch earlier and in turn speeds up the market's tipping. The same effect is found in the case of highly homogeneous agents. When agents are highly homogeneous, the market starts to tip toward one technology rapidly, and its choice is not always consistent with the populations' initial inclination. Increased volatility and faster lock-in increase the possibility that the market will reach an unexpected outcome. The primary contribution of this study is the elucidation of the role of parameters characterizing the market in the development of the lock-in process, and identification of conditions where such unexpected outcomes happen.

차량의 횡방향 주행이격에 의한 아스팔트 콘크리트 포장의 응답특성 분석 (Field Evaluation of Traffic Wandering Effect on Asphalt Pavement Responses)

  • 서영국;권순민;이재훈
    • 대한토목학회논문집
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    • 제26권3D호
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    • pp.453-459
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    • 2006
  • 본 연구는 차량의 주행경로를 정확하게 측정하는 수단을 개발하고 이를 현장계측에 적용하여 주행차량의 횡방향 이격에 의한 아스팔트 콘크리트 포장(이후 아스팔트 포장)의 주요 응답 특성을 규명하고자 하였다. 개발된 주행이격 측정 시스템은 두 개의 레이저 센서로부터 전송된 신호가 차량의 타이어로부터 반사되어오는 물리적 현상을 실시간으로 분석함으로서 도로 포장위의 임의의 기준으로부터 실제 차량이 주행한 경로를 정확하게 관측 할 수 있다. 다양한 주행이격에 의한 아스팔트 포장의 횡방향 수평 변형률과 하부 포장층의 수직응력 변화를 실측하기 위하여 시험도로상의 아스팔트 포장의 일부 구간을 선정, 덤프트럭에 의한 동하중 재하시험을 시행하였다. 차량의 횡방향 이격거리는 주행차로(2차)의 차륜부에 매설된 횡방향 수평 변형률 계측기의 중심을 기준으로 추월차로 방향으로 20cm 간격으로 조수석 차륜에 의한 하중중첩의 영향을 최대한 배재하도록 설정하였다. 현장시험 결과 표층과 중간층에서는 하중재하 위치에서 발생한 압축변형이 이격거리 약 40cm에서부터 점차 인장으로 변화하고 있음을 알 수 있었다. 또한, 보조기층상부와 동상방지층상부에 작용하는 수직응력은 하중재하 위치에서 치대로 발생하였으며 이격거리 50cm 이상부터는 하중에 의한 영향이 상대적으로 미비하였다.