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Getting the Right Spin: A Theory of Value of Social Networks

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  • Bouchard St-Amant, Pier-AndrÃl’

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

  • Bouchard St-Amant, Pier-AndrÃl’, 2012. "Getting the Right Spin: A Theory of Value of Social Networks," Queen's Economics Department Working Papers 274613, Queen's University - Department of Economics.
    • Handle: RePEc:ags:quedwp:274613
    DOI: 10.22004/ag.econ.274613
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    References listed on IDEAS

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    3. Robert M. Bond & Christopher J. Fariss & Jason J. Jones & Adam D. I. Kramer & Cameron Marlow & Jaime E. Settle & James H. Fowler, 2012. "A 61-million-person experiment in social influence and political mobilization," Nature, Nature, vol. 489(7415), pages 295-298, September.
    4. Abhijit V. Banerjee, 1992. "A Simple Model of Herd Behavior," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(3), pages 797-817.
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