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Title: Social Interactions, Network Fluidity and Network Effects
Authors: Tucker, Catherine - MIT Sloan School of Management
Issue Date: 2008
Series/Report no.: Net Institute Working Paper;08-30
Abstract: This paper asks how much the strength of network effects depends on the stability and structure of the underlying social network. I answer this using extensive microdata on all potential adopters of a firm's internal video-messaging system and their subsequent video-messaging. This firm's New York office had to be relocated due to the terrorist attacks of 2001 which lead to a physical re-organization of teams in that city but not in other comparable cities. I study the consequences of this disruption for adoption of video-messaging and the size of network effects. I find evidence that generally network effects are based on direct social interactions. Potential adopters react to adoption only by people they wish to communicate with: They are not affected by adoption by other people. However, when there is a disruption to the social network and communication patterns become less predictable, users become more responsive to adoption by a broader group of users.
URI: http://hdl.handle.net/2451/29456
Appears in Collections:NET Institute Working Papers Series

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