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Adoption Curves and Social Interactions

  • William A. Brock
  • Steven N. Durlauf

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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File URL: http://www.nber.org/papers/w15065.pdf
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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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Publication status: published as 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, 03.
Handle: RePEc:nbr:nberwo:15065
Note: EFG TWP
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  1. 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.
  2. de Paula, Áureo, 2009. "Inference in a synchronization game with social interactions," Journal of Econometrics, Elsevier, vol. 148(1), pages 56-71, January.
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  4. Timothy G. Conley & Christopher R. Udry, 2010. "Learning about a New Technology: Pineapple in Ghana," American Economic Review, American Economic Association, vol. 100(1), pages 35-69, March.
  5. Brock,W.A. & Durlauf,S.N., 2000. "Discrete choice with social interactions," Working papers 7, Wisconsin Madison - Social Systems.
  6. 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.
  7. Charles F. Manski, 1993. "Identification of Endogenous Social Effects: The Reflection Problem," Review of Economic Studies, Oxford University Press, vol. 60(3), pages 531-542.
  8. 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.
  9. Bandiera, Oriana & Rasul, Imran, 2002. "Social Networks and Technology Adoption in Northern Mozambique," CEPR Discussion Papers 3341, C.E.P.R. Discussion Papers.
  10. Ait-Sahalia, Yacine, 2004. "Disentangling diffusion from jumps," Journal of Financial Economics, Elsevier, vol. 74(3), pages 487-528, December.
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  12. Jonathan Skinner & Douglas Staiger, 2007. "Technology Adoption from Hybrid Corn to Beta-Blockers," NBER Chapters, in: Hard-to-Measure Goods and Services: Essays in Honor of Zvi Griliches, pages 545-570 National Bureau of Economic Research, Inc.
  13. Rodolfo E. Manuelli & Ananth Seshadri, 2013. "Frictionless technology diffusion: the case of tractors," Working Papers 2013-022, Federal Reserve Bank of St. Louis.
  14. V. Medvedev, 1992. "Economic Theory," Problems of Economic Transition, M.E. Sharpe, Inc., vol. 35(7), pages 55-73, November.
  15. Reinganum, Jennifer F., . "On the Diffusion of New Technology: A Game Theoretic Approach," Working Papers 312, California Institute of Technology, Division of the Humanities and Social Sciences.
  16. Cabral, Luis M. B., 1990. "On the adoption of innovations with 'network' externalities," Mathematical Social Sciences, Elsevier, vol. 19(3), pages 299-308, June.
  17. Adsera, Alicia & Ray, Debraj, 1998. "History and Coordination Failure," Journal of Economic Growth, Springer, vol. 3(3), pages 267-76, September.
  18. 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.
  19. 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.
  20. Sirakaya, Sibel, 2006. "Recidivism and Social Interactions," Journal of the American Statistical Association, American Statistical Association, vol. 101, pages 863-877, September.
  21. Brock,W.A. & Durlauf,S.N., 2004. "Identification of binary choice models with social interactions," Working papers 2, Wisconsin Madison - Social Systems.
  22. 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.
  23. John Dinardo & Jason Winfree, 2010. "The Law Of Genius And Home Runs Refuted," Economic Inquiry, Western Economic Association International, vol. 48(1), pages 51-64, 01.
  24. 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.
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