Advanced Economic Seminars 166:Innovation Adoption by Forward-Looking Social Learners

Publisher: Time:2016-12-23 16:02:00

Topic: Innovation Adoption by Forward-Looking Social Learners

Lecturer:Mira Frick,Mira Frick is a postdoctoral research fellow at the Cowles Foundation at Yale University and will join Yale's economics department as an assistant professor in July 2017.

Time: 02:00pm-03:30pm, Dec.27(Tue),  2016

Venue: B423, Zhixin Building 

Abstract:  Motivated by the rise of social media, we build a model studying the effect of an economy’s potential for social learning on the adoption of innovations of uncertain quality. Provided consumers are forward-looking (i.e., recognize the value of waiting for information), equilibrium dynamics depend non-trivially on qualitative and quantitative features of the informational environment. We identify informational environments that are subject to a saturation effect, whereby increased opportunities for social learning can slow down adoption and learning and do not increase consumer welfare. We also suggest a novel, purely informational explanation for different commonly observed adoption curves (S-shaped vs. concave curves).