A Theoretical and Empirical Approach to Network Effects
This dissertation approaches network effects from different perspectives and methodologies. Social network effects of immigrants have an impact on the decision of their destination, the presence of this characteristic is exploited in the first chapter to statistically isolate the effect they have on the voting behavior of the district’s representative. Generally, more immigration is correlated with a more liberal voting behavior. The second chapter takes a theoretical approach, a network adoption model is constructed that deviates from the usual linear assumption and incorporates time of adoption and a type-dependent utility function that allows a different utility derivation dependent on the type of members in the networks and not only in size as the linear model assumes. Using simulations, it is found that more heterogeneous populations and the presence of early adopters allow the emergence of clusters and the survival of small platforms even in the presence of strong network effects.