Social Learning and Diffusion of Pervasive Goods: An Empirical Study of an African App Store

80 Pages Posted: 23 Feb 2017

See all articles by Meisam Hejazi Nia

Meisam Hejazi Nia

University of Texas at Dallas, Naveen Jindal School of Management

Brian T. Ratchford

University of Texas at Dallas

Norris Bruce

University of Texas at Dallas

Date Written: February 18, 2017

Abstract

In this study, the authors develop a structural model that combines a macro diffusion model with a micro choice model to control for the effect of social influence on the mobile app choices of customers over app stores. Social influence refers to the density of adopters within the proximity of other customers. Using a large data set from an African app store and Bayesian estimation methods, the authors quantify the effect of social influence and investigate the impact of ignoring this process in estimating customer choices. The findings show that customer choices in the app store are explained better by offline than online density of adopters and that ignoring social influence in estimations results in biased estimates. Furthermore, the findings show that the mobile app adoption process is similar to adoption of music CDs, among all other classic economy goods. A counterfactual analysis shows that the app store can increase its revenue by 13.6% through a viral marketing policy (e.g., a sharing with friends and family button).

Keywords: mobile app store, social learning, state-space model, structural model, semi-parametric Bayesian, MCEM, unscented Kalman filter, hierarchical mixture model, genetic optimization

Suggested Citation

Hejazi Nia, Meisam and Ratchford, Brian T. and Bruce, Norris, Social Learning and Diffusion of Pervasive Goods: An Empirical Study of an African App Store (February 18, 2017). Available at SSRN: https://ssrn.com/abstract=2920051 or http://dx.doi.org/10.2139/ssrn.2920051

Meisam Hejazi Nia (Contact Author)

University of Texas at Dallas, Naveen Jindal School of Management ( email )

P.O. Box 830688
Richardson, TX 75083-0688
United States

HOME PAGE: http://www.hejazinia.com

Brian T. Ratchford

University of Texas at Dallas ( email )

2601 North Floyd Road
Richardson, TX 75083
United States

Norris Bruce

University of Texas at Dallas ( email )

2601 North Floyd Road
Richardson, TX 75083
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
75
Abstract Views
651
rank
451,580
PlumX Metrics