Title: An analysis of a model for the diffusion of engineering innovations under multi-firm competition

Authors: Luca Vincenzo Ballestra; Manlio Del Giudice; Maria Rosaria Della Peruta

Addresses: Dipartimento di Economia, Seconda Università di Napoli, Corso Gran Priorato di Malta, 81043 Capua, Italy ' ESG Management School, 25 Rue Saint-Ambroise, 75011 Paris, France ' Dipartimento di Economia, Seconda Università di Napoli, Corso Gran Priorato di Malta, 81043 Capua, Italy

Abstract: We present a theoretical and experimental analysis of the model for diffusion of engineering innovations that has recently been proposed by Cao and Yang (2012). In particular, under a very mild and realistic assumption on the innovation coefficients, we show that a unique solution defined on the whole set of (positive) times does always exist. Moreover, a numerical method to solve the model by Cao and Yang is developed whose convergence is proven theoretically and which is shown by direct simulation to be very accurate and fast. Finally, an experimental assessment of the model is performed by considering the case of the US satellite radio market. Such an analysis highlights that the model by Cao and Yang can be very useful to predict the dynamics of the firms already present in the market as well the time evolution of new start-ups.

Keywords: innovation diffusion; multi-firm competition; Bass model; engineering innovations; satellite radio; modelling; simulation; firm dynamics; startup evolution; startups.

DOI: 10.1504/IJTM.2014.064992

International Journal of Technology Management, 2014 Vol.66 No.4, pp.346 - 357

Available online: 31 Aug 2014 *

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