The diffusion of mobile social networking: Exploring adoption externalities in four G7 countries

Evidence of network externalities in MSN adoption for all of these countries is found, captured by the left skew of the cumulative adoption curves, confirmed even after taking into account the contrasting effect of heterogeneity in the propensity to adopt.

Abstract

The diffusion of Mobile Social Networking (MSN) is driven by the development of new devices and improved mobile broadband. The instantaneous nature of MSN exchanges enhances the value of data access for mobile users, which generates network externalities. We explore the presence of these externalities in the diffusion of MSN in France, the UK, the US and Germany. For these countries, we compare estimates of two diffusion models: the Bass model and the Bemmaor model. We find evidence of network externalities in MSN adoption for all of these countries, captured by the left skew of the cumulative adoption curves. This evidence is confirmed even after taking into account the contrasting effect of heterogeneity in the propensity to adopt. Our results provide content providers, operators and regulators with insights about marketing strategies, helping with policy formulation under the combined presence of network externalities and heterogeneity.