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Adoption Curves and Social Interactions

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  • William A. Brock
  • Steven N. Durlauf

Abstract

This paper considers the observational implications of social influences on adoption decisions for an environment of perfect foresight adopters. We argue that social influences can produce two observable effects: (1) discontinuities in unconditional adoption curves and (2) pattern reversals in conditional adoption curves, in which earlier adoption is found for one group of actors versus another when fundamentals suggest the reverse ordering should occur; in turn the presence of either of these features can, under weak assumptions, be interpreted as evidence of social influences. As such, these properties are robust implications of social effects. (JEL: C40, D01, O33) (c) 2010 by the European Economic Association.

Suggested Citation

  • William A. Brock & Steven N. Durlauf, 2010. "Adoption Curves and Social Interactions," Journal of the European Economic Association, MIT Press, vol. 8(1), pages 232-251, March.
    • Handle: RePEc:tpr:jeurec:v:8:y:2010:i:1:p:232-251
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    More about this item

    JEL classification:

    • C40 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - General
    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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