Researchers at New York University’s Stern School of Business recently found that a factor in addition to peer group influence may be behind the adoption of products considered “hot” by the general public.
More than 50 percent of decisions to buy a product are due to homophily, that is, the interests and lifestyle choices that diverse people have in common, say researchers Sinan Aral, Lev Muchnik, and Arun Sundararajan, researchers in Stern’s information, operations, and management sciences department.
Their research followed the purchase of mobile service application Yahoo!Go over five months, using online data from 24 million Yahoo customers. Controlling for peer influence and pure randomness, the results indicate that previous research overestimated peer influence in contagious processes by 300 to 700 percent.
Stressing the need for more study, Aral, Muchnik and Sundararajan stated that their findings – should they be confirmed – would influence not only advertising and marketing but issues such as disease control and public health.
(This report is based on a longer article originally found in the spring/summer 2010 issue of STERNbusiness, the alumni magazine of NYU Stern. The research paper is entitled: “Distinguishing Influence Based Contagion from Homophily Driven Diffusion in Dynamic Networks”)