Evaluating the market potential of innovations: A structured survey of diffusion models

This paper provides a systematic methodology to identify general innovation diffusion patterns in a given case study: First, an analytical framework is introduced which structures a review of innovation diffusion research. This framework may be used to structure the analysis of a case study. Second, a classification of innovation diffusion models is developed by focusing on the analytical hypotheses and stylized facts, which they assume. This categorization allows selecting appropriate models for a given case study based on the matching of the model's hypotheses and case study's characteristics. This provides an structured approach to allow innovators to evaluate ex-ante the market potential and the diffusion process, i.e. commercial success of their new product or practice. The paper concludes with critical recommendations on the use of innovation diffusion models. Based on the systematic approach to survey diffusion models, future research opportunities are outlined.