Abstract

This study estimates the importance of network effects and the impact of a consumer’s social network on her choice of mobile phone provider. The study uses network data obtained from surveys of students in four different classes in the Kurdistan University and Azad University of Sanandaj, Iran. We use the quadratic assignment procedure (QAP), a non-parametric arrangement test to adjust the particular error structure of network data. The sample size was 2058 and out of which 1340 respondent strongly coordinates their choice of mobile phone providers, if only their provider induces network effects. This suggests that this coordination depends on network effects rather than on information contagion or pressure to conform to the social environment.

Key words: Network effects, social networks, mobile telecommunications, quadratic assignment procedure (QAP).