Economics Dynamics Problems 69

Economics Dynamics Problems 69 - Continuous dynamic systems...

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Continuous dynamic systems 53 2.6 Diffusion models In recent years we have seen the widespread use of desktop computers, and more recently the increased use of the mobile phone. The process by which such in- novations are communicated through society and the rate at which they are taken up is called diffusion . Innovations need not be products. They can just as easily be an idea or some contagious disease. Although a variety of models have been discussed in the literature (e.g. Davies 1979; Mahajan and Peterson 1985), the time path of the diffusion process most typically takes the form of the S-shaped (sig- moid) curve. Considering the mobile phone, we would expect only a few adoptions in the early stages, possibly business people. The adoption begins to accelerate, diffusing to the public at large and even to youngsters. But then it begins to tail off as saturation of the market becomes closer. At the upper limit the market is saturated.
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