Technology Diffusion with Generational Cohorts

This paper studies technology adoption in which sets of new members—generational cohorts—enter the population over time. I use the diffusion of the prominent social media service, Twitter, through eight generational cohorts of television shows, debuting between 2005 and 2013, to show that the time to reach 25% diffusion decreased from 48 months to 1 month and that diffusion rates quadrupled during this time span. I also provide evidence that diffusion experienced by prior generational cohorts is associated with the diffusion path of subsequent cohorts. This effect is persistent after controlling for the overall growth in the the underlying technology (i.e. Twitter) and characteristics of the adopting population. These results suggest that incumbent firms must account for a distinct diffusion process with each new generational cohort to account for what I call the generational cohort threat and that firms can enter and successfully compete in a market with a widely diffused incumbent technology by providing a differentiated offering that attracts newer cohorts