Diffusion dynamics of network technologies with bounded rational users: Aspiration-based learning

Recently, economic models have been proposed to study adoption dynamics of entrant and incumbent technologies motivated by the need for new network architectures to complement the current Internet. We propose new models of adoption dynamics of entrant and incumbent technologies among bounded rational users who choose a satisfying strategy rather than an optimal strategy based on aspiration-based learning. Two models of adoption dynamics are proposed according to the characteristics of aspiration level. The impacts of switching cost, the benefit from entrant and incumbent technologies, and the initial aspiration level on the adoption dynamics are investigated.