Peer Effect of iPhone Adoptions on Social Networks

30 Pages Posted: 12 Sep 2016 Last revised: 3 Jan 2017

See all articles by T. Tony Ke

T. Tony Ke

The Chinese University of Hong Kong (CUHK)

Clair Yang

University of Washington - Henry. M. Jackson School of International Studies

Date Written: January 2, 2017

Abstract

This paper studies the peer effect of iPhone adoptions in China. We use a unique data set of iPhone adoption records from a provincial capital city in China, in a span of over four years starting from iPhone's first introduction to mainland China. We construct a social network using six month's call transactions among iPhone adopters and all other users on the carrier's network, with strength of social ties measured by duration of calls. Based on the network structure, we test whether an individual's adoption decision is influenced by his friends' adoptions. A fixed-effect model shows that, on average, a friend's adoption increases an individual's adoption probability in next month by 0.89%, and the marginal effect decreases in the size of his current neighboring adopter-base. To further control for potential time-varying correlated unobservables, we instrument adoptions of one's friends by their birthdays, and the IV estimation shows a slightly bigger peer effect at 0.94%. We also investigate how network structures modulate the magnitude of peer influence. Our results show that peer effect is stronger when the influencer has a stronger relationship with the influencee or when he has less friends.

Keywords: Peer Effects, Identification, Social Networks, Product Diffusion

JEL Classification: L14, O33, M31, C26

Suggested Citation

Ke, Tony and Yang, Clair, Peer Effect of iPhone Adoptions on Social Networks (January 2, 2017). MIT Sloan Research Paper No. 5177-16, Available at SSRN: https://ssrn.com/abstract=2837263 or http://dx.doi.org/10.2139/ssrn.2837263

Tony Ke (Contact Author)

The Chinese University of Hong Kong (CUHK) ( email )

Shatin, N.T.
Hong Kong
Hong Kong

Clair Yang

University of Washington - Henry. M. Jackson School of International Studies ( email )

400 Thomson Hall
Seattle, WA 98195
United States

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
328
Abstract Views
1,713
Rank
168,274
PlumX Metrics