The dynamic threshold model of bandwagon innovations: Role of organizational attention and legitimacy

Abstract

Innovations are not always adopted due to their expected economic impact but often due to bandwagon pressure. Fueled by economic uncertainty, these “bandwagon innovations” are adopted once the bandwagon pressure reaches a certain threshold. Existing literature, however, has not examined this threshold’s sources nor considered the effect of a bandwagon adoption decision on threshold. Therefore, building on current knowledge about the bandwagon effect, organizational attention, and legitimacy, this paper develops a theoretical model to help understand the factors affecting threshold and making organizations more or less likely to adopt bandwagon innovations. The novel dynamic threshold model proposed here explains how attention to social or economic factors can affect an organization’s threshold. The model shows that the threshold may change such that an organization may be more likely to adopt a bandwagon innovation after prior resistance or resist one after prior adoption. Implications for organizational decision-makers and future research avenues are also discussed. Plain Language Summary The paper proposes a dynamic threshold model of bandwagon innovations, which illuminates the outcomes of the decision involving bandwagon innovations. If the bandwagon pressure does not exceed the threshold level (or the propensity to adopt a bandwagon innovation), then the organization resists the bandwagon, which increases legitimacy concerns. On the other hand, if the bandwagon pressure exceeds the threshold level, the organization adopts the bandwagon innovation. The primary determinant of this threshold is attention. Attention can be of two types; attention to social factors, which decreases the threshold level, and attention to economic factors, which increases the threshold level. The allocation of attention to the two factors varies based on the outcomes of the bandwagon innovation decision. The increased legitimacy concerns (in case of resisting a bandwagon innovation) lead the organization to allocate more attention to the social factors, thereby reducing the threshold level for the subsequent bandwagon innovation. In case of adopting a bandwagon innovation, the legitimacy concerns are reduced, and the organization's attention is redirected to assimilating the innovation and justifying the adoption costs, which makes the economic factors of any subsequent bandwagon innovation more salient and increases the threshold level until the current innovation is assimilated.