Local Network Effects in the Adoption of a Digital Platform

A-Tier
Journal: Journal of Industrial Economics
Year: 2022
Volume: 70
Issue: 3
Pages: 493-524

Authors (4)

Jin‐Hyuk Kim (not in RePEc) Peter Newberry (not in RePEc) Liad Wagman (Illinois Institute of Technolo...) Ran Wolff (not in RePEc)

Score contribution per author:

1.005 = (α=2.01 / 4 authors) × 2.0x A-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We examine the extent to which network effects on a digital platform are geographically local. Focusing on the fantasy sports market, we find that the size of a county's existing user base on the platform significantly impacts the number of new adopters in that county, while the size of the user base in nearby counties does not. We also find evidence that network effects are heterogenous across income levels. Guided by these results, we demonstrate that the initial distribution of users across counties can significantly influence the growth of the network over time, and draw implications for optimal seeding strategies.

Technical Details

RePEc Handle
repec:bla:jindec:v:70:y:2022:i:3:p:493-524
Journal Field
Industrial Organization
Author Count
4
Added to Database
2026-01-29