Adoption with Social Learning and Network Externalities

ABSTRACT We examine patterns of adoption of a new airtime transfer service over time. We document a strong positive correlation between own adoption and increased usage of the new airtime transfer platform by social neighbours. We examine the possible sources of this correlation by distinguishing be...

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Bibliographic Details
Published in:Oxford bulletin of economics and statistics 2022-12, Vol.84 (6), p.1259-1282
Main Authors: Fafchamps, Marcel, Söderbom, Måns, Boogart, Monique
Format: Article
Language:English
Subjects:
Business & Economics
Economics and Business
Ekonomi och näringsliv
Externality
information
innovation diffusion
markets
Mathematical Methods In Social Sciences
Mathematics
mobile phones
Social learning
spread
technology
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Summary:ABSTRACT We examine patterns of adoption of a new airtime transfer service over time. We document a strong positive correlation between own adoption and increased usage of the new airtime transfer platform by social neighbours. We examine the possible sources of this correlation by distinguishing between network externalities that extend after adoption and social learning that stops after adoption. We find no correlation between usage by social neighbours and own usage after first adoption. We conclude that social learning about the existence and quality of a new product platform are important mechanisms in its diffusion.
ISSN:0305-9049
1468-0084
DOI:10.1111/obes.12491