Is Social Contagion All It’s Cracked Up to Be in New Product Diffusion?: Medical Innovation Revisited

Recent studies have cast doubt on the dominant role of social contagion in new product diffusion. We critically re-assess what is considered the best evidence of social contagion in the diffusion literature: the Medical Innovation study by Coleman, Katz and Menzel(1966) on the diffusion of the antibiotic tetracycline in the mid 1950s. A descriptive analysis of the tetracycline market indicates that factors other than social contagion may have played a dominant role in the diffusion of tetracycline. By employing a modeling approach that blends network analysis and discrete choice modeling, we formally demonstrate that evidence of social contagion reported in earlier analyses vanishes once one controls for marketing effort. While specific to this classic study, our results suggest that it is easy to mistake the effect of exogenous factors like marketing efforts for social contagion and that more careful modeling and analysis is needed to better understand when social contagion is really an important factor in innovation diffusion.