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We develop a model of competing diffusions of goods on a social network. There
are two types of goods and individuals: mass-market and niche-market. We find
that there is a unique stable steady state and show that the adoption of a massmarket
good is greater than its population share. Furthermore, greater connectivity
and homophily in the social network will concurrently increase the prevalence of
niche-market goods. If there is a strategic agent who wants to promote a niche good,
she will invest more in influencing activities than one promoting mass-market goods.
When individuals choose their degree of homophily, we show that niche-market
individuals exhibit greater homophily than mass-market ones.
