Peer effects in the diffusion of innovations: Theory and simulation

Hang Xiong (), Diane Payne and Stephen Kinsella ()

Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), 2016, vol. 63, issue C, 1-13

Abstract: This paper presents a theoretical framework for studying peer effects in the diffusion of innovations. The underlying mechanisms of peer effects are generally under-discussed in existing studies. By investigating diffusion processes in the real world and reviewing previous studies, we find that information transmission, experience sharing and externalities are the basic mechanisms through which peer effects occur. They are termed as information effect, experience effect and externality effect, respectively. The three effects could occur through different types of relationships in a social network. Each of them plays a different role at different stages of a diffusion process. A simulation model incorporating multiple effects in a multiplex network is developed to provide a theoretical study. We simulate the experience effect and the externality effect in a context of rural diffusion. It generates the widely acknowledged patterns of diffusion in various scenarios. The experiments conducted using the model show that peer effects as a whole can be substantially misestimated if the underlying mechanisms are ignored.

Keywords: Peer effects; Diffusion of innovations; Multiplex social networks (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (24)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S2214804316300313
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:soceco:v:63:y:2016:i:c:p:1-13

DOI: 10.1016/j.socec.2016.04.017

Access Statistics for this article

Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics) is currently edited by Pablo Brañas Garza

More articles in Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics) from Elsevier
Bibliographic data for series maintained by Catherine Liu ().