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The Diffusion of competing technological innovations in a network: exploration versus exploitation revisited

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The main purpose of this study is to examine the effect of network structure on the learning processes of exploration and exploitation in the adoption and subsequent diffusion of competing innovations within an organization. The authors couch this work in the area of organizations and intra-firm diffusion of technology, although it is generally applicable to any group of actors who can be positioned within a social network. Technology adoption and diffusion occur through individual choices of more or less autonomous actors among multiple, competing alternatives. Actors choose technologies that they feel will maximize their own performance, but they are boundedly rational, and thus, must rely on their own experience and the experience of adjacent actors in the network to identify and choose among these competing technologies. The repeated implementation of these decisions gives rise to a technology diffusion pattern that ultimately determines the performance of the organization. They examine the influence of three network structures (central, dense and linear) on three measures of technology diffusion: (i) performance, equal to the sum of individual actor performances; (ii) order, measured as the extent to which a common technology is exploited across the organization; and (iii) robustness, measured as the probability that superior technologies are retained somewhere in the organization. They demonstrate, through simulation, that the efficacy of any network structure is contingent on the particular technology environment within which it operates and on the particular measure of diffusion of interest. The results suggest that in environments that are both complex and dynamic, the network structures that facilitate the exchange of information may not necessarily be the most effective.

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en

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application/pdf

Resource resource URL

http://flora.insead.edu/fichiersti_wp/inseadwp2001/2001-14.pdf

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Copyright INSEAD. All rights reserved