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Summary: www.electricitypolicy.org.uk
Abstract
Agent Based Simulation of Technology Adoption
EPRG Working Paper 0923
D. J. Hamilton, W. J. Nuttall and F. A. Roques
We present an agent based model of technology diffusion where
bounded rational agents are faced with uncertainty about the
performance of the new technology versus the old technology as well as
spatial externalities. We observe that a wide range of possible
phenomena emerge, including modest evolutionary change, `S-curve'
technology adoption, as well as more disruptive "punctuated equilibrium"
patterns of adoption. The off-equilibrium diffusion trajectory can be
characterised by radical and unstable shifts in the system reminiscent of
critical effects in phase transition physics. We also study the impact of a
specific form of spatial externality on patterns of technology diffusion,
which models some kind of "fashion effect". We find that such externality
leads to the emergence of clustering in the adoption of technology. Our
model findings are discussed in the light of the changing paradigm of
electricity supply, from the current centralised grid supply to
decentralised electricity generation technologies based on combined
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