Abstract for: Calibrating System Dynamics Models of Technology Diffusion with Structural Breaks: The case of Android Handsets

Among the different application domains for system dynamics (SD) models, diffusion of new technologies has been a major category. A common assumption when calibrating such SD models is that the key parameters driving diffusion, such as contagion strength, are constant over the duration of analysis. For a variety of reasons, particularly in the context of new technologies, these parameters may change over time, sometimes dramatically. This can result in so-called called structural breaks in the diffusion pattern. Calibrating SD models in the presence of structural breaks presents some challenges. One has to first identify if such breaks are present and their temporal location. Once break points are identified, the calibration can proceed in different ways, each with its advantages and disadvantages. We discuss these issues in the context of Android handsets, using quarterly sales data for the period 2009-2012, and referring to specific events in its evolution.