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Can Friends Seed More Buzz and Adoption"

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Abstract

A critical element of word of mouth (WOM) or buzz marketing is to identify seeds, often central actors with high degree in the social network. Seed identification typically requires data on the full network structure, which is often unavailable. We therefore examine the impact of WOM seeding strategies motivated by the friendship paradox to obtain more central nodes without knowing network structure. But higher-degree nodes may communicate less with neighbors; therefore whether friendship paradox motivated seeding strategies increase or reduce WOM and adoption remains an empirical question. We develop and estimate a model of WOM and adoption using data on microfinance adoption across 43 villages in India for which we have data on social networks. Counterfactuals show that the proposed seeding strategies are about 15-20% more effective than random seeding in increasing adoption. Remarkably, they are also about 5-11% more effective than opinion leader seeding, and are relative more effective when we have fewer seeds.

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  • Vineet Kumar & K. Sudhir, 2019. "Can Friends Seed More Buzz and Adoption"," Cowles Foundation Discussion Papers 2178, Cowles Foundation for Research in Economics, Yale University.
    • Handle: RePEc:cwl:cwldpp:2178
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    Cited by:

    1. K. Sudhir & Seung Yoon Lee & Subroto Roy, 2021. "Lookalike Targeting on Others' Journeys: Brand Versus Performance Marketing," Cowles Foundation Discussion Papers 2302R, Cowles Foundation for Research in Economics, Yale University, revised Jun 2022.
    2. K. Sudhir & Seung Yoon Lee & Subroto Roy, 2021. "Lookalike Targeting on Others' Journeys: Brand Versus Performance Marketing," Cowles Foundation Discussion Papers 2302, Cowles Foundation for Research in Economics, Yale University.

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    More about this item

    Keywords

    Word of mouth; Networks; seeding; Friendship paradox; Product adoption; diffusion;
    All these keywords.

    JEL classification:

    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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