Network Stability, Network Externalities and Technology Adoption

Tucker, Catherine

Network Stability, Network Externalities and Technology Adoption

No 17246, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper investigates how the destabilizing of a social network may increase the scope of network externalities, using data on sales of a video-calling system made to an investment bank's employees and subsequent usage by these customers. The terrorist attacks of 2001 led potential customers in New York to start communicating with a new and less predictable set of people when their work teams were reorganized as a result of the physical displacement that resulted from the attacks. This did not happen in other comparable cities. These destabilized communication patterns were associated with potential adopters in New York being more likely to take into account a wider spectrum of the user base when deciding whether to adopt relative to those in other cities. Empirical analysis suggests that the aggregate effect of network externalities on adoption was doubled by this instability.

JEL-codes: L0 L86 L96 (search for similar items in EconPapers)
Date: 2011-07
New Economics Papers: this item is included in nep-ict, nep-net and nep-ure
Note: PR
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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