Eric Abrahamson

Institutional and Competitive Bandwagons: Using Mathematical Modeling as a Tool to Explore Innovation Diffusion

Coauthor(s): Lori Rosenkopf.

Abstract:
The sheer number of organizations adopting an innovation can cause a bandwagon pressure, prompting other organizations to adopt this innovation. Institutional bandwagon pressures occur because nonadopters fear appearing different from many adopters. Competitive bandwagon pressures occur because nonadopters fear below-average performance if many competitors profit from adopting. Our mathematical model of bandwagons examines how organizational collectivities' characteristics determine (a) whether a bandwagon will occur, (b) how many organizations jump on it, and (c) how many retain the innovation it diffuses. Simulating the model suggests, first, that any technological, organizational, or strategic innovation with ambiguous returns can diffuse in a bandwagon manner; second, that minor differences in organizational collectivities can have major effects on bandwagons' occurrence, extent, and persistence; and third, that bandwagons can prompt most organizations in a collectivity to adopt an innovation, even when most of them expect that this adoption will yield negative returns. We suggest how to test our bandwagon model.

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