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Getting The Right Spin: A Theory Of Value Of Social Networks

Author

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  • Pier-Andre Bouchard St-Amant

    (Department of Economics, Queen's University)

Abstract

I examine the problem of maximizing the spread of information in a context where users of a network decide which piece of information is shared. A company thus provides initial information to some users and they then choose what to share to their neighbours. These actions of sharing and choosing produce the characteristics of word-of-mouth advertising over time. I then answer the two following questions: what is the best word-of-mouth campaign that the company can perform and second, what is the value of such a campaign? The optimal solution can be understood as a Nash Equilibria that maximizes the concentration of the initial information to a small group of users. Such solution contrasts with standard measures of user influence and I show that they can sometime be seriously misleading. I provide an exact solution for a wide class of generic network topologies and an algorithm to compute it in polynomial time.

Suggested Citation

  • Pier-Andre Bouchard St-Amant, 2012. "Getting The Right Spin: A Theory Of Value Of Social Networks," Working Paper 1293, Economics Department, Queen's University.
    • Handle: RePEc:qed:wpaper:1293
    as

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    File URL: https://www.econ.queensu.ca/sites/econ.queensu.ca/files/qed_wp_1293.pdf
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    References listed on IDEAS

    as
    1. Constanza Fosco & Annick Laruelle & Angel Sánchez, 2011. "Turnout Intention And Random Social Networks," Advances in Complex Systems (ACS), World Scientific Publishing Co. Pte. Ltd., vol. 14(01), pages 31-53.
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    3. Venkatesh Bala & Sanjeev Goyal, 1998. "Learning from Neighbours," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 65(3), pages 595-621.
    4. de Martí Beltran, Joan, 2009. "Matthew O. Jackson, Social and Economic Networks , Princeton University Press (2008)," Regional Science and Urban Economics, Elsevier, vol. 39(5), pages 644-645, September.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Network Theory; Viral Communication; Word of Mouth Advertising;
    All these keywords.

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation

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