Technology Adoption in the Presence of Network Externalities: A Web-Based Classroom Game

This paper describes a customizable classroom game used to demonstrate the effects of network externalities on the adoption of new technologies. The game is a web-based adaptation of Ruebeck et al.'s [Ruebeck, C. S., N. Stafford, W. Tynan, G. Alpert, Ball, B. Butkevich. 2003. Network externalities and standardization: A classroom demonstration. Southern Econom. J.69 1000--1008] network externalities game. The web-based game is freely available and can be played in a networked lab setting or via the Internet. In this game, players choose one of a number of competing technologies whose utility depends on the number of others choosing the same technology. In subsequent variations, we introduce sequential choice, imperfect information, heterogeneity, “lock-in,” and switching costs.