We use de-identified data from Facebook to study the nature of peer effects in the market for cell phones. To identify peer effects, we exploit variation in friends' new phone acquisitions resulting from random phone losses. A new phone purchase by a friend has a large and persistent effect on an individual's own demand for phones of the same brand. While peer effects increase the overall demand for phones, a friend's purchase of a particular phone brand can reduce an individual's own demand for phones from competing brands, in particular if they are running on a different operating system.
Bailey, Michael, Drew Johnston, Theresa Kuchler, Johannes Stroebel, and Arlene Wong.
"Peer Effects in Product Adoption."
American Economic Journal: Applied Economics,
Neural Networks and Related Topics
Consumer Economics: Empirical Analysis
Microelectronics; Computers; Communications Equipment
Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification