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The late take-off phenomenon in the diffusion of telecommunication services: network effect and the critical mass

Authors
Journal
Information Economics and Policy
0167-6245
Publisher
Elsevier
Publication Date
Volume
15
Issue
4
Identifiers
DOI: 10.1016/s0167-6245(03)00037-4
Keywords
  • Network Effect
  • Diffusion Of Innovation
  • Telecommunication Services
  • Critical Mass
Disciplines
  • Communication

Abstract

Abstract Telecommunication services are distinctive in that their adoptions are influenced by network effect resulting in the late take-off phenomenon and the critical mass problem. In this paper we examined the late take-off phenomenon in the diffusion process of telecommunication services. We first compared the parameters of the diffusion process of consumer durables with those of fax services in the US and Korea. By analyzing the parameters of a new diffusion model based on the threshold model proposed by Markus, we found that the late take-off phenomenon resulted from the low heterogeneity of the threshold distribution for the potential adopters. A simulation approach was proposed for the theoretical implication of the critical mass problem in the start-up telecommunications services.

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