Working Paper: NBER ID: w15065
Authors: William A. Brock; Steven N. Durlauf
Abstract: This paper considers the observational implications of social influences on adoption decisions for an environment of perfect foresight adopters. We argue that social influences can produce two observable effects: 1) discontinuities in unconditional adoption curves and 2) pattern reversals in conditional adoption curves, in which earlier adoption is found for one group of actors versus another when "fundamentals" suggest the reverse ordering should occur; in turn the presence of either of these features can, under weak assumptions, be interpreted as evidence of social influences. As such, these properties are robust implications of social effects.
Keywords: No keywords provided
JEL Codes: C1; D01; O33
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Social interactions (Z13) | Discontinuities in the fraction of adopters (C69) |
| Social interactions (Z13) | Adoption rates (J13) |
| Lower ability agents (L85) | Later adoption (D15) |
| Social interactions (Z13) | Pattern reversals in conditional adoption curves (D15) |
| Greater ability to profit from new technologies (O39) | Earlier adoption (Y20) |
| Lesser ability agents (L85) | Later adoption (D15) |