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Marriott Marquis, Balboa
American Economic Association
Peer Effects and Technology Adoption
Saturday, Jan. 4, 2020 10:15 AM - 12:15 PM (PDT)
- Chair: Theresa Kuchler, New York University
Financial Technology Adoption
AbstractHow do the supply and demand sides of the market respond to financial technology adoption? In this paper, I exploit a natural experiment that caused exogenous shocks to the adoption of a financial technology over time and space. Between 2009 and 2012, the Mexican government disbursed about one million debit cards to existing beneficiaries of its conditional cash transfer program. I combine administrative data on the debit card rollout with a rich collection of Mexican microdata on both consumers and retailers. The shock to debit card adoption has spillover effects on financial technology adoption on both sides of the market: small retailers adopt point-of-sale (POS) terminals to accept card payments, which leads other consumers to adopt cards. Specifically, the number of other consumers with debit cards increases by 21 percent. Richer consumers respond to corner stores' adoption of POS terminals by substituting 12 percent of their supermarket consumption to corner stores. Finally, I use microdata on store prices, store geocoordinates, and consumer choices across store types to estimate the consumer gains from the demand-side policy's effect on supply-side POS adoption.
Knowledge Diffusion through Networks
AbstractHow do geography and other barriers to the free flow of information shape the rate of knowledge diffusion? To address this question, we develop an empirical model of product discrete choice with Bayesian learning on a social network. Estimating this model using monthly data on the cholesterol-drug prescription decisions of over 50,000 U.S. physicians during January 2000 through December 2010, we find that the evolution of product choice efficiency is highly responsive to network structure changes, particularly targeted friction reductions that strengthen the strongest bilateral links.
Peer Effects in Product Adoption
AbstractWe study the nature of peer effects in the market for new cell phones. Our analysis builds on de-identified data from Facebook that combines information on social networks with information on users' cell phone model usage. To identify peer effects, we use variation in friends' new phone acquisitions resulting from random phone losses or from carrier-specific contract terms. New phone acquisitions by a friend have a substantial positive and long-run effect on an individual's own demand for phones of the same brand, most of which is concentrated on the particular model purchased by the friend. While peer effects expand the overall market for cell phones, there are substantial negative demand spillovers across operating systems. We also find that stronger peer effects are exerted by more price-sensitive individuals. This correlation leads to larger social multipliers through peer effects, and larger differences between the elasticities of individual and aggregate demand. We provide evidence that most of the observed peer effects are the result of social learning.
- O3 - Innovation; Research and Development; Technological Change; Intellectual Property Rights