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Peer effects in product adoption

Author

Listed:
  • Theresa Kuchler

    (NYU Stern School of Business)

  • Arlene Wong

    (Princeton University)

  • Johannes Stroebel

    (New York University)

Abstract

To what extend do friendship links affect the adoption of new products? We first combine social network data with individual choices on the adoption of the newly introduced Google Pixel phone to estimate the effects of friends’ adoption of a new product on individual purchasing decisions. We use the exclusive introduction of the Pixel by Verizon combined with differences in Verizon market share across the US to instrument for friends’ initial adoption of the phone. Next, we analyze the role of county level connections on the adoption of a wide variety of products in stores across US counties. Counties that are more connected socially adopt new products at similar times. We explore whether consumers in more socially connected counties have access to a more new products and a wider variety of products and the implications of such consumption externalities on consumer welfare.

Suggested Citation

  • Theresa Kuchler & Arlene Wong & Johannes Stroebel, 2018. "Peer effects in product adoption," 2018 Meeting Papers 1001, Society for Economic Dynamics.
    • Handle: RePEc:red:sed018:1001
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    Cited by:

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    3. Guillermo Alves & Martín Leites & Gonzalo Salas, 2022. "See it to believe it. Experimental evidence on status good consumption among the youth," Documentos de Trabajo (working papers) 22-12, Instituto de Economía - IECON.
    4. Grieser, William & Hadlock, Charles & LeSage, James & Zekhnini, Morad, 2022. "Network effects in corporate financial policies," Journal of Financial Economics, Elsevier, vol. 144(1), pages 247-272.
    5. Han, Xintong & Li, Yushen & Wang, Tong, 2023. "Peer recognition, badge policies, and content contribution: An empirical study," Journal of Economic Behavior & Organization, Elsevier, vol. 214(C), pages 691-707.
    6. Kuchler, Theresa & Russel, Dominic & Stroebel, Johannes, 2022. "JUE Insight: The geographic spread of COVID-19 correlates with the structure of social networks as measured by Facebook," Journal of Urban Economics, Elsevier, vol. 127(C).
    7. Bailey, Michael & Gupta, Abhinav & Hillenbrand, Sebastian & Kuchler, Theresa & Richmond, Robert & Stroebel, Johannes, 2021. "International trade and social connectedness," Journal of International Economics, Elsevier, vol. 129(C).
    8. Diemer, Andreas & Regan, Tanner, 2022. "No inventor is an island: Social connectedness and the geography of knowledge flows in the US," Research Policy, Elsevier, vol. 51(2).
    9. Bailey, Michael & Farrell, Patrick & Kuchler, Theresa & Stroebel, Johannes, 2020. "Social connectedness in urban areas," Journal of Urban Economics, Elsevier, vol. 118(C).
    10. Hu, Zhongchen, 2022. "Social interactions and households’ flood insurance decisions," Journal of Financial Economics, Elsevier, vol. 144(2), pages 414-432.
    11. Àkos Aczél & Lajos Szabó, 2023. "Birds of a feather indebted together: Peer-effects on mortgage decisions," French Stata Users' Group Meetings 2023 20, Stata Users Group.
    12. Kichko, Sergey & Picard, Pierre M., 2021. "Effect of conformism on firm selection, product quality and home bias," Journal of Economic Behavior & Organization, Elsevier, vol. 185(C), pages 402-418.
    13. Oliver Rehbein & Simon Rother, 2020. "The Role of Social Networks in Bank Lending," ECONtribute Discussion Papers Series 033, University of Bonn and University of Cologne, Germany.

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    More about this item

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • M3 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising
    • D4 - Microeconomics - - Market Structure, Pricing, and Design

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