TY  - JOUR
AU  - Tucker,Catherine
TI  - Network Stability, Network Externalities and Technology Adoption
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 17246
PY  - 2011
Y2  - July 2011
UR  - http://www.nber.org/papers/w17246
L1  - http://www.nber.org/papers/w17246.pdf
N1  - Author contact info:
Catherine Tucker
MIT Sloan School of Management
100 Main Street, E62-533
Cambridge, MA 02142
Tel: 617/252-1499
Fax: 617/258-7597
E-Mail: cetucker@mit.edu
AB  - This paper investigates how the destabilizing of a social network may increase the scope of network externalities, using data on sales of a video-calling system made to an investment bank's employees and subsequent usage by these customers. The terrorist attacks of 2001 led potential customers in New York to start communicating with a new and less predictable set of people when their work teams were reorganized as a result of the physical displacement that resulted from the attacks.  This did not happen in other comparable cities. These destabilized communication patterns were associated with potential adopters in New York being more likely to take into account a wider spectrum of the user base when deciding whether to adopt relative to those in other cities. Empirical analysis suggests that the aggregate effect of network externalities on adoption was doubled by this instability.
ER  -