Nonmonotonic Status Effects in New Product Adoption

Abstract

We investigate how the tendency to adopt a new product independently of social influence, the recipients' susceptibility to such influence, and the sources' strength of influence vary with social status. Leveraging insights from social psychology and sociology about middle-status anxiety and conformity, we propose that for products that potential adopters expect to boost their status, both the tendency to adopt independently from others and the susceptibility to contagion is higher for middle-status than for low- and high-status customers. Applying a nested case-control design to the adoption of commercial kits used in genetic engineering, we find evidence that status affects (i) how early or late one adopts regardless of social influence, (ii) how susceptible one is to such influence operating through social ties, and (iii) how influential one's own behavior is in triggering adoption by others. The inverse-U patterns in (i) and (ii) are consistent with middle-status anxiety and conformity. The findings have implications for how to use status to better understand adoption and contagion mechanisms, and for targeting customers when launching new products.

Social Contagion in New Product Trial and Repeat

“…Hence, this study answers recent calls to move research from whether contagion is at work to how and why it is at work (Aral 2011, Godes 2011). In addition, our evidence of a nonmonotonic status effect extends recent insights into how status considerations affect customer behavior (Hu and Van den Bulte 2014).…”

“…They gain little additional esteem from adhering to group norms and are given greater latitude than others to deviate from group norms (Hollander 1958). Consequently, it is customers in the middle of the status distribution who have the greatest tendency to conform to norms, a pattern referred to as middle-status conformity and documented in adoption studies by Phillips and Zuckerman (2001) and Hu and Van den Bulte (2014). Along similar lines, Bosk (2003, p. 75) describes how physicians of middle status experience the most pressure to adhere to their surgical ward's local norms.…”

“…This is a key research priority (e.g., Aral 2011, Godes 2011, Iyengar et al 2011b, Lewis et al 2012, Libai et al 2010. Recent work has documented systematic variations across customers in influence and susceptibility, but, to our knowledge, only in the realm of new product adoption (e.g., Aral and Walker 2012, Goldenberg et al 2009, Hu and Van den Bulte 2014, Iyengar et al 2011a, Katona et al 2011 or outside the realm of new products altogether (e.g., Godes andMayzlin 2009, Trusov et al 2010). Studying social contagion in both trial and repeat facilitates assessment of the effect of peer behavior on two different dependent variables.…”

Indicators of opinion leadership in customer networks: self-reports and degree centrality

“…This implies that when a customer's network is larger, the available effort per person may be smaller (e.g., Katona et al 2011;Leskovec et al 2007). However, degree centrality is also an indicator of a customer's status, which is positively related to opinion leadership (Hu and Van den Bulte 2014). Given that a smartphone is a high-technology and visible product, we expect that status considerations may play a large role.…”

Social networks in marketing research 2001–2014: a co-word analysis

“…They have been applied to study consumer behaviors e.g. customer preference (Yang and Allenby 2003), leadership influence (Kratzer and Lettl 2009;Godes 2011), new production adoption (Hu and Van den Bulte 2014), individual behavior prediction (Goel and Goldstein 2013) etc. social network reflects the connections and relationships among different ties, it evolves with new ties' generation and old ties' disappearance, and the changes of social network structures also have effects on ties' movements.…”