Diffusion in Social Networks: Experimental Evidence on Information Sharing Vs Persuasion

Human behaviors and innovations often spread through social networks, yet the mechanisms driving this diffusion — information sharing or persuasion — remain debated. Using a large-scale randomized controlled trial in Uttar Pradesh, India, we examine these dynamics while promoting a newly introduced savings commitment product. Our findings reveal persuasion as the dominant channel: villages where persuasion was incentivized experienced significantly higher product sign-up and take-up rates, even without corresponding increases in financial literacy or product knowledge. Conversely, providing information alone had minimal impact. The combined intervention of persuasion and information delivered the highest outcomes, highlighting their complementary roles. These results highlight the critical importance of persuasion in driving behavioral change and suggest that information dissemination alone may often be insufficient for effective adoption and diffusion.