Adoption of a New Technology. The Role of Niche Groups, Network Effects and Learning

This paper addresses two questions. First, why existing technological regimes persist for long periods of time in the face of competition from new technologies. Second, how the co-evolutionary process between users and producers can be modulated for creating new desirable transition paths. We model scenarios where escaping a lock-in from a knowledge regime is difficult due to network externalities and stabilised learning pathways on the user and producer sides. We incorporate within a multi agent simulation model, factors such as the interdependence between the demand and supply of a technology, the structure of user networks, the learning processes of both users and producers, the complexity of the technologies as well as the market value of them. Our multi-agent simulation results reveal that the size of the initial group required to achieve transition depends on how the initial group is selected as well as the network structure of users.