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Outline

A mathematical model for the diusion of photovoltaics


Viviana Fanelli, Lucia Maddalena
Dipartimento di Scienze Economiche Matematiche e Statistiche Universit` a di Foggia

Rome, June, 30th 2008 ISS on Risk Measurement and Control 2008

Viviana Fanelli, Lucia Maddalena A mathematical model for the diusion of photovoltaics

Dipartimento di Scienze Economiche Matematiche e Statistiche Universit` a di Foggia

Outline

Outline

1. 2. 3. 4. 5. 6.

The Innovation Diusion Theory A model for the diusion of photovoltaics The stability of the equilibrium Conclusions Future Research References

Viviana Fanelli, Lucia Maddalena A mathematical model for the diusion of photovoltaics

Dipartimento di Scienze Economiche Matematiche e Statistiche Universit` a di Foggia

Outline

Outline

1. 2. 3. 4. 5. 6.

The Innovation Diusion Theory A model for the diusion of photovoltaics The stability of the equilibrium Conclusions Future Research References

Viviana Fanelli, Lucia Maddalena A mathematical model for the diusion of photovoltaics

Dipartimento di Scienze Economiche Matematiche e Statistiche Universit` a di Foggia

Outline

Outline

1. 2. 3. 4. 5. 6.

The Innovation Diusion Theory A model for the diusion of photovoltaics The stability of the equilibrium Conclusions Future Research References

Viviana Fanelli, Lucia Maddalena A mathematical model for the diusion of photovoltaics

Dipartimento di Scienze Economiche Matematiche e Statistiche Universit` a di Foggia

Outline

Outline

1. 2. 3. 4. 5. 6.

The Innovation Diusion Theory A model for the diusion of photovoltaics The stability of the equilibrium Conclusions Future Research References

Viviana Fanelli, Lucia Maddalena A mathematical model for the diusion of photovoltaics

Dipartimento di Scienze Economiche Matematiche e Statistiche Universit` a di Foggia

Outline

Outline

1. 2. 3. 4. 5. 6.

The Innovation Diusion Theory A model for the diusion of photovoltaics The stability of the equilibrium Conclusions Future Research References

Viviana Fanelli, Lucia Maddalena A mathematical model for the diusion of photovoltaics

Dipartimento di Scienze Economiche Matematiche e Statistiche Universit` a di Foggia

Outline

Outline

1. 2. 3. 4. 5. 6.

The Innovation Diusion Theory A model for the diusion of photovoltaics The stability of the equilibrium Conclusions Future Research References

Viviana Fanelli, Lucia Maddalena A mathematical model for the diusion of photovoltaics

Dipartimento di Scienze Economiche Matematiche e Statistiche Universit` a di Foggia

Outline

Outline

1. 2. 3. 4. 5. 6.

The Innovation Diusion Theory A model for the diusion of photovoltaics The stability of the equilibrium Conclusions Future Research References

Viviana Fanelli, Lucia Maddalena A mathematical model for the diusion of photovoltaics

Dipartimento di Scienze Economiche Matematiche e Statistiche Universit` a di Foggia

The Innovation Diusion Theory

Part I The Innovation Diusion Theory

Viviana Fanelli, Lucia Maddalena A mathematical model for the diusion of photovoltaics

Dipartimento di Scienze Economiche Matematiche e Statistiche Universit` a di Foggia

The Innovation Diusion Theory

The diusion of an innovation is the process by which an innovation is communicated through certain channels over time among the members of a social system (Rogers, 2005)

Viviana Fanelli, Lucia Maddalena A mathematical model for the diusion of photovoltaics

Dipartimento di Scienze Economiche Matematiche e Statistiche Universit` a di Foggia

The Innovation Diusion Theory

The adoption process

The adoption process


Knowledge ; Persuasion; Decision or evaluation; Implementation; Conrmation or adoption. Communication channels

Historical distinction between technological break thoughts (innovations) and engineering renements (improvements) (De Solla Price, 1985)

Viviana Fanelli, Lucia Maddalena A mathematical model for the diusion of photovoltaics

Dipartimento di Scienze Economiche Matematiche e Statistiche Universit` a di Foggia

The Innovation Diusion Theory

Marketing problems

Marketing problems

1960: To develop marketing strategy in order to promote the adoption of a new product and penetrate the market.

Viviana Fanelli, Lucia Maddalena A mathematical model for the diusion of photovoltaics

Dipartimento di Scienze Economiche Matematiche e Statistiche Universit` a di Foggia

The Innovation Diusion Theory

Marketing problems

The Bass model, 1969

q dA(t ) = p (m A(t )) + A(t )(m A(t )) (1) dt m p is a parameter that takes into account as the new adopters joint the market as a result of external inuences: activities of rms in the market, advertising, attractiveness of the innovation, q refers to the magnitude of inuence of another single adopter

Viviana Fanelli, Lucia Maddalena A mathematical model for the diusion of photovoltaics

Dipartimento di Scienze Economiche Matematiche e Statistiche Universit` a di Foggia

The Innovation Diusion Theory

Time delay model with stage structure

Stage structure model

Time delay models with stage structure for describing the new technology adoption process
W. Wang, and P. Fergola, and S. Lombardo, and G. Mulone, 2006 Beretta (2001)

Viviana Fanelli, Lucia Maddalena A mathematical model for the diusion of photovoltaics

Dipartimento di Scienze Economiche Matematiche e Statistiche Universit` a di Foggia

The Innovation Diusion Theory

Time delay model with stage structure

Photovoltaics diusion

Photovoltaics technology: critical nature its diusion must be supported by the government policy of incentives The use of public subsides accelerate market penetration, but actually the costs of photovoltaics are still so high and the incentives are substantially very low The process of diusion is stopped at the rst stage and it cannot develop.

Viviana Fanelli, Lucia Maddalena A mathematical model for the diusion of photovoltaics

Dipartimento di Scienze Economiche Matematiche e Statistiche Universit` a di Foggia

The model

Part II A model for the diusion of photovoltaics

Viviana Fanelli, Lucia Maddalena A mathematical model for the diusion of photovoltaics

Dipartimento di Scienze Economiche Matematiche e Statistiche Universit` a di Foggia

The model

THE MODEL

Aim

We will propose a time delay model to simulate the adoption process when individuals in the social system are inuenced by external factors (government incentives and production costs) and internal factors (interpersonal communication). We will nd a nal level of adopters and we will carry out a qualitative analysis to study the stability of model equilibrium solution.

Viviana Fanelli, Lucia Maddalena A mathematical model for the diusion of photovoltaics

Dipartimento di Scienze Economiche Matematiche e Statistiche Universit` a di Foggia

The model

THE MODEL

The model
The total population C consists of the adopters of the new technology, A, and of the potential adopters, P . i is a government incentive and c represents the production costs, e (i c ) = a is an external factor of inuence. is the average time for an individual to evaluate if to adopt or not the technology. Then, the knowledge and the awareness of technology occur at time t and in the interval [t , t ] the individual decides whether to adopt or not the technology.

Viviana Fanelli, Lucia Maddalena A mathematical model for the diusion of photovoltaics

Dipartimento di Scienze Economiche Matematiche e Statistiche Universit` a di Foggia

The model

THE MODEL

The model

is the percentage of individuals that dont adopt the technology after the test period, e = k is the fraction of individuals that are still interested in the adoption after . is the valid contact rate of adopters with potential adopters, the discontinuance rate of adopters and a valid contact rate between the adopters at time t and those at time t .

Viviana Fanelli, Lucia Maddalena A mathematical model for the diusion of photovoltaics

Dipartimento di Scienze Economiche Matematiche e Statistiche Universit` a di Foggia

The model

THE MODEL

The model

A(t ) + P (t ) = C dA(t ) = [a + A(t )] (C A(t ))k A(t )+ A(t )A(t ), dt > 0 (2)

Viviana Fanelli, Lucia Maddalena A mathematical model for the diusion of photovoltaics

Dipartimento di Scienze Economiche Matematiche e Statistiche Universit` a di Foggia

The model

THE MODEL

The equilibrium

A =

(Ck ak )

(Ck ak )2 4( k )akC 2( k )

Viviana Fanelli, Lucia Maddalena A mathematical model for the diusion of photovoltaics

Dipartimento di Scienze Economiche Matematiche e Statistiche Universit` a di Foggia

The model

THE MODEL

Sucient condition for a positive equilibrium

Theorem
If ( k ) < 0, that is if the growth factor due to the interpersonal communication inside the adopters class contributes in increasing the number of adopters less than the factor of imitation, then the time delay dierential equation admits an unique positive equilibrium.

Viviana Fanelli, Lucia Maddalena A mathematical model for the diusion of photovoltaics

Dipartimento di Scienze Economiche Matematiche e Statistiche Universit` a di Foggia

The stability of the equilibrium

Stability

Stability
Let x (t ) = A(t ) A . Then dx (t ) = a0 x (t ) + b0 x (t ) + f (x (t ), x (t )) dt where a0 = ( A ), b0 = (kC ak 2kA + A ), f (x (t ), x (t )) = x (t )x (t ) kx 2 (t ).

Viviana Fanelli, Lucia Maddalena A mathematical model for the diusion of photovoltaics

Dipartimento di Scienze Economiche Matematiche e Statistiche Universit` a di Foggia

The stability of the equilibrium

Stability

Stability

Poincar` e-Liapunov Theorem The characteristic equation of the delayed dierential equation linear part is e + a0 e + b0 = 0 Hayes Theorem

Viviana Fanelli, Lucia Maddalena A mathematical model for the diusion of photovoltaics

Dipartimento di Scienze Economiche Matematiche e Statistiche Universit` a di Foggia

The stability of the equilibrium

Stability

Stability

Theorem
The equilibrium is asymptotically stable if
2 [(, , , a, k , C )] + 2( A )(, , , a, k , C ) p where (, , , a, k , C ) = (kC ak )2 4akC ( k ) and is the root ( of = ( A ) tan , such that , 0 < < 2 when A > (,,,a,k ,C ) < < when < A < . 2 2 2 <
2

Viviana Fanelli, Lucia Maddalena A mathematical model for the diusion of photovoltaics

Dipartimento di Scienze Economiche Matematiche e Statistiche Universit` a di Foggia

The stability of the equilibrium

Stability switch

Stability switch

We apply the methods proposed by Beretta (2006) and used by W.Wang, P. Fergola, S. Lombardo, and G. Mulone (2006) to demonstrate the time delay dierential equation admits stability switches.

Viviana Fanelli, Lucia Maddalena A mathematical model for the diusion of photovoltaics

Dipartimento di Scienze Economiche Matematiche e Statistiche Universit` a di Foggia

The stability of the equilibrium

Stability switch

Procedure

Consider the following rst order characteristic equation D (, ) = a( ) + b ( ) + c ( )e ( ) = 0, > 0 (3)

where a( ) = , b ( ) = a0 ( ) and c ( ) = b0 ( ) and the condition b ( ) + c ( ) = 0 is fulll because b0 ( ) = a0 ( ).

Viviana Fanelli, Lucia Maddalena A mathematical model for the diusion of photovoltaics

Dipartimento di Scienze Economiche Matematiche e Statistiche Universit` a di Foggia

The stability of the equilibrium

Stability switch

Procedure
If = i with > 0 is a root of our characteristic equation, we must have F (, ) := 2 + ( a0 ( ))2 ( b0 ( ))2 = 0, ( ) = which is true only if k (Ck ak )2 4( ak )akC + (Ck ak + ) >2 k b0 ( )2 a0 ( )2 > 0 (4)

Viviana Fanelli, Lucia Maddalena A mathematical model for the diusion of photovoltaics

Dipartimento di Scienze Economiche Matematiche e Statistiche Universit` a di Foggia

The stability of the equilibrium

Stability switch

Procedure

Consider sin( ) = and cos ( ) = where ( ) (0, 2 ) ( )a( ) = c ( ) b0 ( )2 a0 ( )2 b0 ( )

b ( ) a0 ( ) = c ( ) b0 ( )

Viviana Fanelli, Lucia Maddalena A mathematical model for the diusion of photovoltaics

Dipartimento di Scienze Economiche Matematiche e Statistiche Universit` a di Foggia

The stability of the equilibrium

Stability switch

Switches
Set n ( ) =

( ) + 2n ( )

for n {0, 1, ...}

Then STABILITY SWITCHES occur at the zeros of the following function Sn ( ) = n ( ), n {0, 1, ...}.

(5)

Since it is dicult to obtain the zeros of Sn ( ) analytically, we x the parameters and use numerical calculations. If n = 0, C = 20, = 0.2, = 0.1, a = 0.1, k = e 0.2 and = 0.05, then = 1.32.

Viviana Fanelli, Lucia Maddalena A mathematical model for the diusion of photovoltaics

Dipartimento di Scienze Economiche Matematiche e Statistiche Universit` a di Foggia

Conclusions

Part IV Conclusions

Viviana Fanelli, Lucia Maddalena A mathematical model for the diusion of photovoltaics

Dipartimento di Scienze Economiche Matematiche e Statistiche Universit` a di Foggia

Conclusions

Conclusions

Conclusions I
Conclusions We have proposed a mathematical model with stage structure to simulate adoption processes. The model includes the awareness stage, the evaluation stage and the decision-making stage. We have found the nal level of adopters for certain parameters and, from studying the local stability of the equilibrium, we have found that the nal level of adopters is unchanged under small perturbations (if the evaluation delay is small). The model can be used to predict the number of adopters for certain parameters and economic and nancial estimations about market prot may be made if the equilibrium is stable.

Viviana Fanelli, Lucia Maddalena A mathematical model for the diusion of photovoltaics

Dipartimento di Scienze Economiche Matematiche e Statistiche Universit` a di Foggia

Conclusions

Conclusions

Conclusions I

Conclusions We have shown that the model admits stability switches. This means the number of adopters could uctuate in time. (This is an eective characteristic of the new technology markets and, in particular, of the photovoltaics market).

Viviana Fanelli, Lucia Maddalena A mathematical model for the diusion of photovoltaics

Dipartimento di Scienze Economiche Matematiche e Statistiche Universit` a di Foggia

Future Research

Part V Future Research

Viviana Fanelli, Lucia Maddalena A mathematical model for the diusion of photovoltaics

Dipartimento di Scienze Economiche Matematiche e Statistiche Universit` a di Foggia

Future Research

Future Research

Future Research I

First The existence of stability switches suggests to investigate the existence of periodic solutions and their stability. Second Since there exist stochastic factors in the environment as well as in the interior system and the action of these factors can cause a random adoption pattern of the new technology, we wish to investigate the eect of stochastic perturbations for the model.

Viviana Fanelli, Lucia Maddalena A mathematical model for the diusion of photovoltaics

Dipartimento di Scienze Economiche Matematiche e Statistiche Universit` a di Foggia

References

References I
F.M. Bass. A new product growth model for consumer durables. Management Sci., 15:215227, January 1969. R. Bellman and K.L. Cooke. Dierential-dierence equations. Academic Press, New York, 1963. E. Beretta and Y. Kuang. Geometric stability switch criteria in delay dierential system with delay-dependent parameters. SIAM J. Math.Anal., 33:11441165, 2001.

Viviana Fanelli, Lucia Maddalena A mathematical model for the diusion of photovoltaics

Dipartimento di Scienze Economiche Matematiche e Statistiche Universit` a di Foggia

References

References II
D. de Solla Price. The science/technology relationship, the craft of experimental science, and policy for the improvement of high technology innovation. Research Policy, 13:320, 1984. J.K. Hale and S.M.V. Lunel. Introduction to Functional Dierential Equations. Springer-Verlag, New York, 1993. V. Mahajan, E. Muller, and F.M. Bass. New-Product Diusion Models. in Eliashberg, J, Lilien, G.L (Eds),Handbooks in Operations Research and Management Science, Elsevier Science Publishers, New York, NY, 1993.
Viviana Fanelli, Lucia Maddalena A mathematical model for the diusion of photovoltaics Dipartimento di Scienze Economiche Matematiche e Statistiche Universit` a di Foggia

References

References III

E.M. Rogers. Diusion of Innovations. The Free Press, New York, 4th edition, 1995. W. Wang, P. Fergola, S. Lombardo, and G. Mulone. Mathematical models of innovation diusion with stage structure. Applied Mathematical Modelling, 30:129146, 2006.

Viviana Fanelli, Lucia Maddalena A mathematical model for the diusion of photovoltaics

Dipartimento di Scienze Economiche Matematiche e Statistiche Universit` a di Foggia

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