• Asia pacific journal of information systems
• /
• v.20 no.1
• /
• pp.127-140
• /
• 2010

The benefit that a consumer derives from the use of a good often depends on the number of other consumers purchasing the same goods or other compatible items. This property, which is known as network externality, is significant in many IT related industries. Over the past few decades, network externalities have been recognized in the context of physical networks such as the telephone and railroad industries. Today, as many products are provided as a form of system that consists of compatible components, the appreciation of network externality is becoming increasingly important. Network externalities have been extensively studied among economists who have been seeking to explain new phenomena resulting from rapid advancements in ICT (Information and Communication Technology). As a result of these efforts, a new body of theories for 'New Economy' has been proposed. The theoretical bottom-line argument of such theories is that technologies subject to network effects exhibit multiple equilibriums and will finally lock into a monopoly with one standard cornering the entire market. They emphasize that such "tippiness" is a typical characteristic in such networked markets, describing that multiple incompatible technologies rarely coexist and that the switch to a single, leading standard occurs suddenly. Moreover, it is argued that this standardization process is path dependent, and the ultimate outcome is unpredictable. With incomplete information about other actors' preferences, there can be excess inertia, as consumers only moderately favor the change, and hence are themselves insufficiently motivated to start the bandwagon rolling, but would get on it once it did start to roll. This startup problem can prevent the adoption of any standard at all, even if it is preferred by everyone. Conversely, excess momentum is another possible outcome, for example, if a sponsoring firm uses low prices during early periods of diffusion. The aim of this paper is to analyze the dynamics of the adoption process in markets exhibiting network effects by focusing on two factors; switching and agent heterogeneity. Switching is an important factor that should be considered in analyzing the adoption process. An agent's switching invokes switching by other adopters, which brings about a positive feedback process that can significantly complicate the adoption process. Agent heterogeneity also plays a important role in shaping the early development of the adoption process, which has a significant impact on the later development of the process. The effects of these two factors are analyzed by developing an agent-based simulation model. ABM is a computer-based simulation methodology that can offer many advantages over traditional analytical approaches. The model is designed such that agents have diverse preferences regarding technology and are allowed to switch their previous choice. The simulation results showed that the adoption processes in a market exhibiting networks effects are significantly affected by the distribution of agents and the occurrence of switching. In particular, it is found that both weak heterogeneity and strong network effects cause agents to start to switch early and this plays a role of expediting the emergence of 'lock-in.' When network effects are strong, agents are easily affected by changes in early market shares. This causes agents to switch earlier and in turn speeds up the market's tipping. The same effect is found in the case of highly homogeneous agents. When agents are highly homogeneous, the market starts to tip toward one technology rapidly, and its choice is not always consistent with the populations' initial inclination. Increased volatility and faster lock-in increase the possibility that the market will reach an unexpected outcome. The primary contribution of this study is the elucidation of the role of parameters characterizing the market in the development of the lock-in process, and identification of conditions where such unexpected outcomes happen.

• KSCE Journal of Civil and Environmental Engineering Research
• /
• v.26 no.3D
• /
• pp.453-459
• /
• 2006

This paper presents an experimental evaluation of wandering effect on asphalt concrete pavement responses. A laser-based wandering system has been developed and its performance is verified under various field conditions. The portable wandering system composed of two laser sensors with Position Sensitive Devices can allow one to measure the distance between laser sensors and tire edges of moving vehicle. Therefore, lateral position of each wheel on the pavement can be determined in a real time manner. Pavement responses due to different loading paths are investigated using a roll over test which is carried out on one of asphalt surfaced pavements in the Korea Highway Corporation test road. The pavement section (A5) consists of 5 cm thick surface course; 7 cm intermediate course; and 18 mm base course, and is heavily instrumented with strain gauges, vertical soil pressure cells and thermo-couples. From the center of wheel paths, seven equally-spaced lateral loading paths are carefully selected over an 140 cm wandering zone. Test results show that lateral horizontal strains in both surface and intermediate courses are mostly compressive right under the loading path and tensile strains start to develop as the loading offset becomes 40 cm from the wheel path. The development of the vertical stresses in the top layers of subbase and anti-frost is found to be minimal once the loading offset becomes 50 cm.