Knowledge Diffusion Through Networks
58 Pages Posted: 15 Jan 2020
Date Written: December 20, 2019
How 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.
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