Modeling Reputational and Informational Influences in Threshold Models of Bandwagon Innovation Diffusion

Bandwagon innovation diffusion is characterized by a positive feedback loop where adoptions by some actors increase the pressure to adopt for other actors. In particular, when gains from an innovation are difficult to quantify, such as implementing quality circles or downsizing practices, diffusion is likely to occur through a bandwagon process. In this paper we extend Abrahamson and Rosenkopf’s (1993) model of bandwagon diffusion to examine both reputational and informational influences on this process. We find that the distribution of reputations among the set of potential adopters affects the extent of bandwagon diffusion under conditions of moderate ambiguity, and we find that bandwagons occur even when potential adopters receive information about others’ unprofitable experiences with the innovation.