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Social Networks and New Product Choice

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  • Richards, Timothy J.
  • Allender, William J.
  • Hamilton, Stephen F.

Abstract

Inuential individuals in a social network environment are important in shaping preferences for new products. In this study, we adopt an incentive compatible choice-based conjoint analysis approach to generate data on the introduction of a new ice cream product. We use spatial econometric methods to determine how individuals are likely to change their preferences when exposed to the choices of other members in their social network. We nd evidence that agents look to others for guidance in their preference for subjective or taste-speci c parameters, but rely on own preferences for objectively measured attributes such as price. We also use spatial methods to determine which network-member is the most inuential. We nd that the most connected member is not necessarily the most inuential, and that inuence can be determined econometrically.

Suggested Citation

  • Richards, Timothy J. & Allender, William J. & Hamilton, Stephen F., 2012. "Social Networks and New Product Choice," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124762, Agricultural and Applied Economics Association.
  • Handle: RePEc:ags:aaea12:124762
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    References listed on IDEAS

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    Cited by:

    1. Murendo, Conrad & Wollni, Meike & de Brauw, Alan & Mugabi, Nicholas, 2015. "Social network effects on mobile money adoption in Uganda," 2015 Conference, August 9-14, 2015, Milan, Italy 212514, International Association of Agricultural Economists.
    2. Bonnet, Céline & Richards, Timothy J., 2016. "Models of Consumer Demand for Differentiated Products," TSE Working Papers 16-741, Toulouse School of Economics (TSE).
    3. Fang, Di & Richards, Timothy, 2016. "New Maize Variety Adoption in Mozambique: A Spatial Approach," 2016 Annual Meeting, July 31-August 2, 2016, Boston, Massachusetts 235388, Agricultural and Applied Economics Association.
    4. Hübler, Michael, 2015. "Labor mobility and technology diffusion: A new concept and its application to rural Southeast Asia," Journal of Asian Economics, Elsevier, vol. 39(C), pages 137-151.
    5. Bruno Wichmann & Minjie Chen & Wiktor Adamowicz, 2016. "Social Networks and Choice Set Formation in Discrete Choice Models," Econometrics, MDPI, Open Access Journal, vol. 4(4), pages 1-26, October.
    6. Bazzani, Claudia & Nayga, Rodolfo M. Jr. & Caputo, Vincenzina & Canavari, Maurizio & Danforth, Diana M., 2016. "On the Use of the BDM Mechanism in Non-Hypothetical Choice Experiments," 2016 Annual Meeting, July 31-August 2, 2016, Boston, Massachusetts 235904, Agricultural and Applied Economics Association.

    More about this item

    Keywords

    choice-based conjoint; experimental economics; new product introduction; social network analysis; spatial econometrics; Marketing; Production Economics; Public Economics; Research Methods/ Statistical Methods;

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