Innovations Diffusion on Heterogeneous Newman-Watts Small-World Network: A Computer Simulation

We examine two incompatible technologies diffusion on the heterogeneous Newman-Watts small-world network by using the tool of computer simulations of threshold models. In such an interaction network, the behaviors of potential adopters are influenced by both their acquaintances and all the adopters in the entire network. we divide network effects into two kinds. The influences of acquaintances are called direct network effects, which act as a brake on the winner-take-all process, often lead to market sharing outcome and some acquaintances adopts a laggard technology even when a lead technology has built a large installed base. The influences of all the adopters in the entire network are called indirect network effects, which are great impetus on the winner-take-all process. In addition, the outcomes of computer simulation show that a technology with larger initial installed base is not always lead to its absolute advantage in market shares at the steady state.