Multivariate Visual Diffusion for Social Groups

70 Pages Posted: 1 Jun 2011

See all articles by Eric Bradlow

Eric Bradlow

University of Pennsylvania - Marketing Department

Jonah A. Berger

University of Pennsylvania - Marketing Department

Blakeley B. McShane

Northwestern University - Kellogg School of Management

Date Written: May 31, 2011

Abstract

Car purchases are among the largest and most expensive purchases consumers ever make. While functional and economic concerns are obviously important, we examine whether social influence also plays a role.

Using a Bayesian probability model along with data on over 1.6 million cars sold over a nine-year period, we examine how social influence affects car purchase volume. In particular, we investigate three questions: (1) Are people more likely to buy a car if others around them have recently done so? (2) Do these effects vary based on the identity (e.g., age and gender) of the prior purchasers? (3) Are they moderated by visibility, the ease of seeing others' behavior?

After subjecting our estimates to an extensive set of tests (a quasi-experimental design using distance, matching, and dosage; model- and covariate-based controls; permutation re-sampling; and out-of-sample tests) to assess whether they might be due to something other than social influence, we find that social effects are (1) present (one additional purchase is made for every seven to ten prior purchases made locally by a given subgroup), (2) stronger for prior purchases by men than by women, and (3) larger in areas where others behavior should be more visible (i.e., more people commute in car visible ways).

Keywords: diffusion, social identity, social influence, probability models

JEL Classification: C11, C15

Suggested Citation

Bradlow, Eric and Berger, Jonah A. and McShane, Blakeley B., Multivariate Visual Diffusion for Social Groups (May 31, 2011). Available at SSRN: https://ssrn.com/abstract=1856207 or http://dx.doi.org/10.2139/ssrn.1856207

Eric Bradlow

University of Pennsylvania - Marketing Department ( email )

700 Jon M. Huntsman Hall
3730 Walnut Street
Philadelphia, PA 19104-6340
United States
215-898-8255 (Phone)

Jonah A. Berger

University of Pennsylvania - Marketing Department ( email )

700 Jon M. Huntsman Hall
3730 Walnut Street
Philadelphia, PA 19104-6340
United States

Blakeley B. McShane (Contact Author)

Northwestern University - Kellogg School of Management ( email )

2001 Sheridan Road
Evanston, IL 60208
United States

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