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Adoption with Social Learning and Network Externalities*
Author(s) -
Fafchamps Marcel,
Söderbom Måns,
Boogart Monique
Publication year - 2022
Publication title -
oxford bulletin of economics and statistics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.131
H-Index - 73
eISSN - 1468-0084
pISSN - 0305-9049
DOI - 10.1111/obes.12491
Subject(s) - network effect , externality , correlation , social network (sociolinguistics) , product (mathematics) , social learning , quality (philosophy) , business , microeconomics , industrial organization , economics , knowledge management , computer science , social media , world wide web , philosophy , geometry , mathematics , epistemology
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.