The Journal of Technology Transfer

, Volume 34, Issue 1, pp 24–42 | Cite as

The rank, stock, order and epidemic effects of technology adoption: an empirical study of bounce protection programs



Karshenas and Stoneman (RAND J Econ 24(4):503–528, 1993) gathered four theories of technology adoption: the rank, stock, order and epidemic effects. Tests of these four effects reveal support for rank and epidemic but not the stock or order effects. Since then numerous other studies have tried to find evidence in support of the stock and order effects. But evidence has been elusive, until now. Further, a survey by Frame and White (J Econ Lit 42:116–144, 2004) concludes that much more work is needed into financial innovation. This paper accomplishes three goals: (1) evidence is found to support certain technology adoption theories (the order effects and possibly the stock effects), (2) since the technology under consideration is a financial innovation called bounce protection, the paper answers Frame and White’s call for papers, and (3) refinements are made to the Karshenas and Stoneman methodology and found to be superior to the original empirical model.


Banking Bounce protection Checking account Diffusion NSF fees Overdraft protection Technology adoption 

JEL Classifications

L10 O33 G21 



The author would like to thank Rob Porter, Shane Greenstein, Ron Braeutigam, Bill Rogerson, Nick Kreisle, Larry White, and an anonomous referee, for helpful comments and ideas.


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Copyright information

© Springer Science+Business Media, LLC 2007

Authors and Affiliations

  1. 1.Department of EconomicsEast Carolina UniversityGreenvilleUSA

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