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Social network design for inducing effort

Author

Listed:
  • Pinar Yildirim

    (University of Pennsylvania)

  • Yanhao Wei

    (University of Southern California)

  • Christophe Bulte

    (University of Pennsylvania)

  • Joy Lu

    (Carnegie Mellon University)

Abstract

Many companies create and manage communities where consumers observe and exchange information about the effort exerted by other consumers. Such communities are especially popular in the areas of fitness, education, dieting, and financial savings. We study how to optimally structure such consumer communities when the objective is to maximize the total or average amount of effort expended. Using network modeling and assuming peer influence through conformity, we find that the optimal community design consists of a set of disconnected or very loosely connected sub-communities, each of which is very densely connected within. Also, each sub-community in the optimal design consists of consumers selected such that their “standalone” propensity to exert effort correlates negatively with their propensity to conform and correlates positively with their propensity to influence others.

Suggested Citation

  • Pinar Yildirim & Yanhao Wei & Christophe Bulte & Joy Lu, 2020. "Social network design for inducing effort," Quantitative Marketing and Economics (QME), Springer, vol. 18(4), pages 381-417, December.
    • Handle: RePEc:kap:qmktec:v:18:y:2020:i:4:d:10.1007_s11129-020-09227-6
    DOI: 10.1007/s11129-020-09227-6
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    More about this item

    Keywords

    Customer community design; Network design; Network optimization; Peer influence;
    All these keywords.

    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification
    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing

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