Social Networks and New Product Choice

In‡uential individuals in a social network environment are important in shaping preferences for new products. In this study, we adopt an incentive compatible choice-based conjoint analysis approach to generate data on the introduction of a new ice cream product. We use spatial econometric methods to determine how individuals are likely to change their preferences when exposed to the choices of other members in their social network. We …nd evidence that agents look to others for guidance in their preference for subjective or taste-speci…c parameters, but rely on own preferences for objectively measured attributes such as price. We also use spatial methods to determine which network-member is the most in‡uential. We …nd that the most connected member is not necessarily the most in‡uential, and that in‡uence can be determined econometrically.