System optimization model of adoption of a new infrastructure with multi-resource and multi-demand sites

Abstract

This study develops a conceptual system optimization model of adoption of a new infrastructure technology with multiple resource sites and multiple demand sites. With the model, this paper analyzes how the distance, spillover effect, demand, initial investment cost, and learning rate influence the adoption of the new infrastructure technology and presents optimization results of the model in different scenarios. The main findings of the study are: from the perspective of system optimization, (1) different distances among different resource-demand pairs will result in different adoption time of a new infrastructure; (2) technological spillover among different resource-demand pairs will accelerate the adoption of a new infrastructure; (3) it is hard to say that higher demand will pull faster adoption of a new infrastructure, and the optimal time of adopting of a new infrastructure is very sensitive to its technological learning rate.

Keywords

System optimization model / technology adoption / new infrastructure

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