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Adoption Curves and Social Interactions

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Author Info
William A. Brock
Steven N. Durlauf

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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.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 15065.

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Date of creation: Jun 2009
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Handle: RePEc:nbr:nberwo:15065

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Find related papers by JEL classification:
C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: General
D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
O33 - Economic Development, Technological Change, and Growth - - Technological Change - - - Technological Change: Choices and Consequences; Diffusion Processes

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  1. Reinganum, Jennifer F, 1981. "On the Diffusion of New Technology: A Game Theoretic Approach," Review of Economic Studies, Blackwell Publishing, vol. 48(3), pages 395-405, July. [Downloadable!] (restricted)
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  2. Bryan S. Graham, 2008. "Identifying Social Interactions Through Conditional Variance Restrictions," Econometrica, Econometric Society, vol. 76(3), pages 643-660, 05. [Downloadable!] (restricted)
  3. Jonathan Skinner & Douglas Staiger, 2005. "Technology Adoption From Hybrid Corn to Beta Blockers," NBER Working Papers 11251, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  4. Lee, Lung-fei, 2007. "Identification and estimation of econometric models with group interactions, contextual factors and fixed effects," Journal of Econometrics, Elsevier, vol. 140(2), pages 333-374, October. [Downloadable!] (restricted)
  5. Sirakaya, Sibel, 2006. "Recidivism and Social Interactions," Journal of the American Statistical Association, American Statistical Association, vol. 101, pages 863-877, September. [Downloadable!] (restricted)
  6. Jennifer F. Reinganum, 1981. "Market Structure and the Diffusion of New Technology," Bell Journal of Economics, The RAND Corporation, vol. 12(2), pages 618-624, Autumn. [Downloadable!] (restricted)
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  7. Brock, William A. & Durlauf, Steven N., 2007. "Identification of binary choice models with social interactions," Journal of Econometrics, Elsevier, vol. 140(1), pages 52-75, September. [Downloadable!] (restricted)
  8. Brock, William A. & Durlauf, Steven N., 2001. "Interactions-based models," Handbook of Econometrics, in: J.J. Heckman & E.E. Leamer (ed.), Handbook of Econometrics, edition 1, volume 5, chapter 54, pages 3297-3380 Elsevier. [Downloadable!] (restricted)
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  9. Charles F. Manski, 1997. "Monotone Treatment Response," Econometrica, Econometric Society, vol. 65(6), pages 1311-1334, November.
  10. Brock, W A, 1999. "Scaling in Economics: A Reader's Guide," Industrial and Corporate Change, Oxford University Press, vol. 8(3), pages 409-46, September.
  11. Charles F. Manski & John V. Pepper, 2000. "Monotone Instrumental Variables, with an Application to the Returns to Schooling," Econometrica, Econometric Society, vol. 68(4), pages 997-1012, July.
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  12. Brock, William A & Durlauf, Steven N, 2001. "Discrete Choice with Social Interactions," Review of Economic Studies, Blackwell Publishing, vol. 68(2), pages 235-60, April.
  13. Munshi, Kaivan, 2004. "Social learning in a heterogeneous population: technology diffusion in the Indian Green Revolution," Journal of Development Economics, Elsevier, vol. 73(1), pages 185-213, February. [Downloadable!] (restricted)
  14. Adsera, Alicia & Ray, Debraj, 1998. " History and Coordination Failure," Journal of Economic Growth, Springer, vol. 3(3), pages 267-76, September. [Downloadable!] (restricted)
  15. Oriana Bandiera & Imran Rasul, 2006. "Social Networks and Technology Adoption in Northern Mozambique," Economic Journal, Royal Economic Society, vol. 116(514), pages 869-902, October. [Downloadable!] (restricted)
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  16. Richard C. Sutch, 2008. "Henry Agard Wallace, the Iowa Corn Yield Tests, and the Adoption of Hybrid Corn," NBER Working Papers 14141, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  17. Manski, Charles F, 1993. "Identification of Endogenous Social Effects: The Reflection Problem," Review of Economic Studies, Blackwell Publishing, vol. 60(3), pages 531-42, July. [Downloadable!] (restricted)
  18. Ait-Sahalia, Yacine, 2004. "Disentangling diffusion from jumps," Journal of Financial Economics, Elsevier, vol. 74(3), pages 487-528, December. [Downloadable!] (restricted)
  19. Richard C. Sutch, 2008. "Henry Agard Wallace, The Iowa Corn Yield Tests, And The Adoption Of Hybrid Corn," Working Papers 200807, University of California at Riverside, Department of Economics, revised Jun 2008. [Downloadable!]
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