Effects of Knowledge and Learning in Technology Adoption: Social Networks, Adoption, and Persistence in the Video Game Market

The development of digital products is often supported by social networks that emerge among users. These networks facilitate both the flow of product information and the development of product-specific human capital which, in turn, affect product adoption and retention.

In this project we exploit granular information of social networks from the video gaming market that allows us to track the sharing of product-specific information and the development of product-specific human capital. First, analyzing the social networks of individual gamers allows us to examine the importance of word-of-mouth, or viral marketing, for adoption decisions. Second, we analyze the retention of gamers by assessing the strength and persistence of their reactions to different exogenous shocks.

The analyses help in understanding the role of social learning in consumers’ adoption and retention decisions in a fast-paced consumer-oriented industry. The results will influence appropriate schemes for incorporating social networks into marketing strategies.

Duration: April 2012 - September 2013

• Benjamin Engelstätter, Centre for European Economic Research (ZEW) Mannheim, Research Group Information and Communication Technologies
• Dr. Jörg Claussen, Copenhagen Business School
• Associate Professor Michael R. Ward, University of Texas at Arlington, Department of Economics