Control by social influence: durables vs. non-durables

Individual behavior such as the adoption of new products is influenced by taking account of others' actions. We study social influence in a heterogeneous population and analyze the behavior of the dynamic processes. We distinguish between two information regimes: (i) agents are influenced by the adoption ratio, (ii) agents are influenced by the usage history. We identify the stable equilibria and long-run frequencies of the dynamics. We then show that the two processes generate qualitatively different dynamics, leaving characteristic `footprints'. In particular, (ii) favors more extreme outcomes than (i). This has direct implications for the control of policy interventions.