Competition and Social Influence: The Diffusion of the Sixth‐Generation Processor in the Global Computer Industry

Abstract

When is a social actor most strongly influenced by its peers? This article addresses this question by clarifying when computer firms were most strongly affected by the choices of their structurally equivalent rivals to adopt a well‐known technology: Intel’s sixth‐generation processor. The core hypothesis is that the effect of adoptions by structurally equivalent firms increases with the competitive pressure that a focal firm faces in its market position. The results show that a chosen firm is most strongly influenced by comparable others when it faces scale‐based competition and is diversified. The implications of this study are twofold: a social actor’s sensitivity to the conduct of others may depend not only on its place in a hierarchy but also on the nature of its ties to an external audience; and a contingent theory of social influence may be necessary to characterize diffusion processes correctly, particularly when external and time‐varying nonnetwork factors have significant effects.