Peer Influence in the Diffusion of iPhone 3G over a Large Social Network

Author List: Matos, Miguel; Ferreira, Pedro; Krackhardt, David;
MIS Quarterly, 2014, Volume 38, Issue 4, Page 1103-1133.
In this paper, we study the effect of peer influence in the diffusion of the iPhone 3G across a number of communities sampled from a large dataset provided by a major European Mobile carrier in one country. We identify tight communities of users in which peer influence may play a role and use instrumental variables to control for potential correlation between unobserved subscriber heterogeneity and friends’ adoption. We provide evidence that the propensity of a subscriber to adopt increases with the percentage of friends who have already adopted. During a period of 11 months, we estimate that 14 percent of iPhone 3Gs sold by this carrier were due to peer influence. This result is obtained after controlling for social clustering, gender, previous adoption of mobile Internet data plans, ownership of technologically advanced handsets, and heterogeneity in the regions where subscribers move during the day and spend most of their evenings. This result remains qualitatively unchanged when we control for changes over time in the structure of the social network. We provide results from several policy experiments showing that, with this level of effect of peer influence, the carrier would have hardly benefitted from using traditional marketing strategies to seed the iPhone 3G to benefit from viral marketing.
Keywords: Peer influence; homophily; diffusion; community identification; viral marketing
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#228 0.136 internet peer used access web influence traditional fraud world ecology services impact cases wide home studies addition choice 2008 telephone
#107 0.120 app brand mobile apps paid utility facebook use consumption users brands effects activities categories patterns controls extension store positive factor
#234 0.115 social networks influence presence interactions network media networking diffusion implications individuals people results exchange paper sites evidence self-disclosure important examine
#49 0.103 adoption diffusion technology adopters innovation adopt process information potential innovations influence new characteristics early adopting set compatibility time initial current
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#262 0.065 impact data effect set propensity potential unique increase matching use selection score results self-selection heterogeneity evidence measure associated estimate leads