Service Adoption and Defection Decisions: Understanding the Effects of Social Influences in Consumers’ Social Networks

The processes of products’ adoption and defection are closely related and are likely to influence each other. We utilize social network information and information regarding customers’ adoption and defection decisions of a cellular add-on, to analyze the social interplay between the two decisions. We estimate a multi-event hazard model and find that the likelihood of adoption (defection) decreases with exposure to the defection (adoption) of network neighbors. we term these effects cross-process social effects. Correspondingly, we refer to the influence of exposure to adoption (defection) on the likelihood of adoption (defection) as within-process social effects. We find that adoption decisions are influenced by cross-process social effects and by within-process social effects to a similar extent, whereas defection decisions are substantially more affected by within-process social effects than by cross-process social effects. The social effects discussed were also affected by tie strength and homophily with adopting (defecting) neighbors.