Facebook was introduced in February 2004 by Mark Zuckerberg from his dorm room at Harvard University. Eight years later more than 900 million people had a Facebook account. This is a dramatic success story of the diffusion of an innovation. Normally when somebody develops a new product it can take years to get it out on the market. For example, the Sony Betamax was considered to be a technologically superior product for recording TV programs, but it never became popular. Instead the VHS system from JVC became the dominant format. There are many flops and some successes in innovations. In this chapter we will use models to explore why this is the case.
Figure 1. Sony Betamax.
The study of diffusion focuses on the attributes of innovations that affect the speed and scope of the diffusion. The social network structure can affect the spread. When the average path length of agents within a network is small, the innovation may spread faster. However, the diffusion speed and scope also depends on the medium of diffusion. Is an innovation easy to acquire when one comes in contact with it? Can the idea be spread via mass media, or does one need to train a person to acquire the skill? In this chapter we discuss a number of examples of diffusion processes. We will look at the diffusion of innovations and the adoption of new products.