Abstract
This paper presents a diffusion model and addresses the issue of control on uses of technology via agent-based computer simulations. Interdependencies between adoption decisions of potential adopters have been central in recent diffusion models. This paper models two forms of interdependencies that are not frequently addressed in previous studies. These are early adoption advantages (EAA hereafter) and institutional change (IC hereafter). EAA corresponds to the use-value that agents create with the innovation if they can adopt earlier than others. When most of the EAA acquired at the individual level is due to a re-distribution of existing values at the society level EAA corresponds to a constant-sum game. The institutions modelled in this study are shared thoughts and routines in a society. In this context, IC refers to changes in institutions - such as markets, infrastructures and expectations - induced by the increasing levels of diffusion. One of the interesting characteristics of these two forms of interdependencies is that they can create involuntary adoptions, which would not take place had actions of other agents not created an environment in which non-adoption is a worse state than the initial stage of agents before the launch of the innovation. The computer simulations cover four different scenarios. The first scenario studies variable-sum EAA and the results of this scenario reveal a different diffusion curve than the usual S-shaped one. This diffusion curve is W-shaped - due to adaptive expectations agents oscillate between high and low diffusion levels - resembling the retrospective trends in fashion. The second scenario investigates the constant-sum EAA. In this scenario, the society locks-in to the innovation and this result is interesting because agents would all be better off if none of them adopted the innovation. The scenario, therefore, reveals an example of prisoner's dilemma. Scenario 3 and 4 study IC together with EAA and demonstrate a second way in which the society locks-in to the innovation; when institutions in the society change significantly society members are forced to adopt the innovation. The major implication of the findings of this study is the possibility that inefficient, potentially destructive or partially harmful technologies diffuse extensively given that they entail some particular forms of consumer interdependencies.