Abstract
We present a new product choice model in which individual agents are assumed to interact with each other across spatial hierarchies under random Gaussian laws. A restricted form that allows estimation of the model and inference on the random interaction structure on available data is then derived. This is essentially a random coefficients model which we estimate on repeated cross-sectional data for the adoption of video cassette recorders in Britain. It is argued that the random coefficient approach, based on economic and social-theoretic arguments allows for more accurate inference on the structure of social interactions, and thus may provide a useful way to help alleviate the inferential problem caused by the identification issues stated in the literature. This very same problem has for long been at the core of the debate between alternative economic and marketing theories of new product diffusion.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.