Adoption with Social Learning and Network Externalities

Marcel Fafchamps, Mans Soderbom and Monique vanden Boogaart

No 22282, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Using a large administrate dataset covering the universe of phone calls and airtime transfers in a country over a four year period, we examine the pattern of adoption of airtime transfers over time. We start by documenting strong network effects: increased usage of the new airtime transfer service by social neighbors predicts a higher adoption probability. We then seek to narrow down the possible sources of these network effects by distinguishing between network externalities and social learning. Within social learning, we also seek to differentiate between learning about existence of the new product from learning about its quality or usefulness. We find robust evidence suggestive of social learning both for the existence and the quality of the product. In contrast, we find that network effects turn negative after first adoption, suggesting that airtime transfers are strategic substitutes among network neighbors.

JEL-codes: D12 D83 O33 (search for similar items in EconPapers)
Date: 2016-05
New Economics Papers: this item is included in nep-cse, nep-ict, nep-net and nep-soc
Note: DEV PR
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Published as Marcel Fafchamps & Måns Söderbom & Monique van den Boogart, 2022. "Adoption with Social Learning and Network Externalities*," Oxford Bulletin of Economics and Statistics, vol 84(6), pages 1259-1282.

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Journal Article: Adoption with Social Learning and Network Externalities* (2022)
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