Multi-generation diffusion model for economic assessment of new technology

Summary form only given. In the 21^st century, development of emerging information technology is the essence of advancement. This kind of new technology, however, often requires a great deal of amount of initial investment for both procedures of R&D and commercialization. As cost invested in developing the specified technology is increasing, investors are paying more attention to cost benefit analysis (CBA). One of the basic elements of CBA for new technological development is the diffusion pattern of demand of such technology. In this paper, we show how multi-generation technology diffusion model can be applied for more accurate CBA for information technology. Additionally, Monte Carlo simulation is performed to find influential factors on the CBA of a cybernetic building system. As a result of employing the multi-generation model instead of the single generation diffusion, more conservative decision can be made in terms of the value/benefit of the new technology