Diffusion of Innovations: The Leader-Imitator Combined Structure Model

We built a model of diffusion of innovations in markets where the set of ultimate adopters consists of two segments: leaders, who are more in touch with new developments and who also affect the other segment, pure imitators, whose own adoptions do not affect leaders. The main results are given as follows: (1) The speed of innovations diffusion is not a monotonic process but a process of ascending in the beginning and descending after; (2) Diffusion in a mixture of leaders and imitators can exhibit a "gap" between the early and later stages of the diffusion curve; (3) Leaders play a critical role in the whole process of innovations diffusion.