Simulating the Diffusion of Competing Multi-generation Technologies: An Agent-Based Model and Its Application to the Consumer Computer Market in Germany

Consumer adoption of innovations is a key concern for strategic management in many companies as adoption ultimately drives the market success of new products. The respective adoption processes are inherently complex due to the social systems (i.e., the respective consumer markets) from which they arise. Markets characterized by the simultaneous presence of several multi-generation technologies, wherein products that rest upon successively introduced generations of technology compete against each other, constitute a particularly challenging case. Our agent-based model contributes to the field of technology diffusion research in that it accounts for novel and advanced product features in each technology generation, the reluctance of (some) users to switch to a new (as yet unfamiliar) technology, and various social influences between consumers. Calibrated with data from several sources, our results closely replicate the actual development of the German consumer computer market from 1994 to 2013.