Asymmetric Social Interactions in Physician Prescription Behavior: The Role of Opinion Leaders

41 Pages Posted: 13 Oct 2006 Last revised: 30 Jul 2014

See all articles by Harikesh Nair

Harikesh Nair

Stanford University - Graduate School of Business

Puneet Manchanda

University of Michigan, Stephen M. Ross School of Business

Tulikaa Bhatia

Rutgers, The State University of New Jersey - Rutgers Business School at Newark & New Brunswick

Date Written: May 2008

Abstract

We quantify the impact of social interactions and peer effects in the context of prescription choices by physicians. Using detailed individual-level prescription data, along with self-reported social network information, we document that physician prescription behavior is significantly influenced by the behavior of research-active specialists, or "opinion leaders" in the physician's reference group. We leverage a natural experiment in the category, whereby new guidelines released about the therapeutic nature of the focal drug generated conditions where physicians were more likely to be influenced by the behavior of specialist physicians in their network. We find important, statistically significant peer effects that are robust across model specifications. We use the estimates to measure the incremental value to firms of directing targeted sales-force activity to these opinion leaders, and present estimates of the social multiplier of detailing in this category.

Keywords: Social Interactions, Peer effects, Social Multiplier, Contagion, Physician Prescription Behavior, Pharmaceutical Industry

JEL Classification: L65, M30, M31

Suggested Citation

Nair, Harikesh and Manchanda, Puneet and Bhatia, Tulikaa, Asymmetric Social Interactions in Physician Prescription Behavior: The Role of Opinion Leaders (May 2008). Stanford University Graduate School of Business Research Paper No. 1970. Available at SSRN: https://ssrn.com/abstract=937021 or http://dx.doi.org/10.2139/ssrn.937021

Harikesh Nair (Contact Author)

Stanford University - Graduate School of Business ( email )

655 Knight Way
Stanford, CA 94305-5015
United States
650-736-4256 (Phone)

HOME PAGE: http://faculty-gsb.stanford.edu/nair/index.html

Puneet Manchanda

University of Michigan, Stephen M. Ross School of Business ( email )

701 Tappan Street
Ann Arbor, MI MI 48109
United States
734-936-2445 (Phone)
734-936-8716 (Fax)

Tulikaa Bhatia

Rutgers, The State University of New Jersey - Rutgers Business School at Newark & New Brunswick ( email )

Janice H. Levin Bldg., Room 121
94 Rockafeller Road
Piscataway, NJ 08854-8054
United States

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