Technology Diffusion, Stability and Decay: some Results

Abstract

The proposition that history matters is not new in the economic debate, but growing recognition that technological change matters for economic growth has renewed and rephrased that proposition in more formal if narrower terms. Rosenberg, Paul David and Brian Arthur are names associated with path-dependence. Ebeling et alit used Markov processes as a random walk, and de Araújo used a birth-and-death model as a stochastic equivalent of a diffusion equation for finite markets. The present paper further explores this line, with new results. By examining similarities and differences between the author’s results and those of others, we try to discern the implications of these assumptions for the results obtained on technology diffusion, and raise a few questions on the significance of stable equilibrium for analytic purposes. Finally, we discuss extensions to incorporate insights from other work aiming to arrive at a better understanding of the real processes of technology innovation and diffusion.