| With the increasingly drastic technological competition, all various of innovations emerge endlessly in the world. Changes come with opportunities. Technical innovation will bring the flow and reconstruction of resources and elements between firms, industries, and nations. From macroeconomic to microeconomic levels, all agents are actively preparing for the next round of dynamic competition, expecting for the leading position.Nevertheless, independent innovation is neither "take-and-accept-completely", nor "autarky" at all. Despite the source of innovation, the most important task is putting the innovation to use and enhancing productivity. On the one hand, the trend of the intra-industry and intra-firm application of innovations is progressively obvious, the innovation which is beneficial for some economic bodies maybe harmful for others, so the innovation owns space differentiation. On the other hand, new things are unnecessarily good things, which need fairly long time to verify their real values, namely the innovation has time differentiation. Facing with many kinds of available innovations, firms have to discern that which innovation is worth adopting and when the adoption is the most favorable. In a word, innovation is a "two-edge" sword, which can lift the firm to the heaven, and also can throw it into the hell. Therefore, only in the right time and choose the right technology, we can drive the industry's technological progress and the national economy rapid development.This dissertation begins with "the debates for 3G"; abstract a basic question as the focus of the research, namely the decision of innovation adoption and timing games for firms. This topic involves some concrete issues including confronting an exogenous technology innovation, whether the firm will be adopt it joyfully, under which conditions it will do like this, and why exist obvious difference between private and social incentives.This dissertation is organized as follows:The first chapter is the introduction. Through distinguishing two concepts of technology progress and technology innovation, defining the economic attribute of 3G is a cumulative innovation in microeconomic level. So the fundamental issue about 3G is discerning the innovation adoption body's attitude and incentive.The second chapter is a literature review, summarizing the theoretical approaches using analyzing innovation adoption. Innovation adoption is not an independent academic system, scattered distributing in management decision theory, investment theory and industry theory. This paper absorbing some ideas in management and investment theory,using the framework of industry theory and game theory, explores the microeconomic mechanism behind the process of innovation adoption and diffusion.The third chapter analyzes the incentives of monopolist for the adoption of cost-reducing and quality-improvement innovation in detail. Three basic factors affecting monopolist motivation are the degree of innovation improvement, production cost and demand. Furthermore, the adoption of innovation is also affected by the monopolist's strategic motivation. The firm can choose upgrade positively, or deter innovation, so this is give another explanation for "planned obsolescence" and "sleeping patents" in the market.The theme of the forth chapter is about innovation adoption and diffusion between several potential adopters under uncertain conditions. The uncertain nature of innovation determines the existence of the lags between the innovations occurs in the market and it becomes available. Considering the strategic interaction between potential actors, the timing game maybe multi-equilibrium. Generally, the firms will not adopt it simultaneously. The technology's nature or market structure will endow the firm's first-move or later-move advantage, so the diffusion path presents the shape of S. During the process of adoption, there is obvious conflict between private incentive and social desirable level, which is alike the typical conflict of personal rational and collective rational in "prisoner's dilemma" game.The fifth chapter analyzes the cumulative innovation's adoption and diffusion in industries where network effects are overwhelming. Generally, in these industries, inefficiency is common phenomenon in technology renewal, which is called "excess inertia" or "excess momentum". This inefficiency is essentially equal with the inefficiency mentioned aforetime, but the difference lies in the network effects enlarge the inertia or momentum. Additionally, in order to utilize the network effects in this industry, technology always occurs as a standard. Standardization can help the accepted innovation diffuse among firms, but it also will deter later superior innovation to be adopted.The sixth chapter allows for practical instance of telecommunication industry and 3G technological characters, construct a two-stage game model, and analyze under exogenous, uncertain and quality-improving innovation circumstance, telecommunication network characterized durable goods and rapid technology change how to react to innovation adoption. This sector concludes two parts: pure monopoly and two rival firms undergoing Bertrand competing. With uncertain innovation, the rational reaction of firm is to delay the adoption. And the incentives of incumbent firm, potential entrant and social planner are all different, depending on the scope of many parameters.The seventh chapter compares several index about mobile telecommunication marketin our country present days and Japan-Korea past times when they adopt 3G It is easy to know that the market structure, penetration rate and policy orientation in our country are similar with those of Japan and Korea, but our country development levels is far behind those of two nations. The conclusion is that if we adopt 3G at present, it is hard to achieve performance like Japan and Korea; and the incumbent operators have incentives to delay adoption.Concluding close the paper in the eighth chapter and put forward the future research directions.
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