Adoption epidemics and viral marketing
Year: 2025
Type: article
Abstract: An innovation (e.g., new product or idea) spreads like a virus, transmitted by those who have previously adopted it. Agents update their beliefs about innovation quality based on private signals and when they hear about the innovation. We characterize equilibrium adoption dynamics and the resulting lifecycle of virally‐spread innovations. Herding on adoption can occur but only early in the innovation lifecycle, and adoption eventually ceases for all virally‐spread innovations. A producer capable of advertising directly to consumers finds it optimal to wait and allow awareness to grow virally initially after launch.
Source: Theoretical Economics
DOI: 10.3982/te5886
Authors: David McAdams, Yangbo Song
Institutions: Duke University, Chinese University of Hong Kong
Language: English
Field: Decision Sciences
Domain: Social Sciences
Open Access status: diamond
OpenAlex ID: W4410940467