Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/320290 
Year of Publication: 
2025
Citation: 
[Journal:] Theoretical Economics [ISSN:] 1555-7561 [Volume:] 20 [Issue:] 2 [Year:] 2025 [Pages:] 453-480
Publisher: 
The Econometric Society, New Haven, CT
Abstract: 
An innovation (e.g., new product or idea) spreads like a virus, transmitted by those who have previously adopted it. Agents update their beliefs about innovation quality based on private signals and when they hear about the innovation. We characterize equilibrium adoption dynamics and the resulting lifecycle of virally-spread innovations. Herding on adoption can occur but only early in the innovation lifecycle, and adoption eventually ceases for all virally-spread innovations. A producer capable of advertising directly to consumers finds it optimal to wait and allow awareness to grow virally initially after launch.
Subjects: 
Adoption epidemic
SIR model
innovation lifecycle
viral marketing
JEL: 
C72
D62
D83
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc Logo
Document Type: 
Article

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