Analysis on the feedback effect for the diffusion of innovative technologies focusing on the green car

Previous studies of technical competitive relationship have mostly focused on the analysis of one-directional impact of the technical attribute on market share. However, there is a cyclical feedback effect between the technical attributes and market share, and that means the small difference of competitiveness at the early phase of technology diffusion can greatly affect the final market share. As such, this study presents the system dynamics model which can forecast sales of innovative technology considering the feedback effect of market share on technical attributes. For that, the causal loop diagram among the various variables was defined using the econometric model applied and proven in various studies of the Bass diffusion model, discrete choice model, etc. to reinforce the theoretical background of the causal relationship among the variables of the forecasting model. Furthermore, infrastructure building scenarios and feedback effect scenarios were applied to the developed forecasting model to present the implication for successful adoption of green car technology from the infrastructure development view point.

► We develop the system dynamics based on the sales forecasting model.
► We analyze the impact of the feedback effect to market share of innovative technology.
► The feedback effect amplifies the impact of infrastructure development.