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The Structure of Online Consumer Communication Networks

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  • Harmsen - van Hout, Marjolein J.W.

    () (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN))

  • Herings, P. Jean-Jacques

    () (Department of Economics, School of Business and Economics, Maastricht University)

  • Dellaert, Benedict G.C.

    () (Department of Business Economics / Marketing Section, Erasmus School of Economics, Erasmus University Rotterdam)

Abstract

We analyze the structure of bilateral communication links among consumers in virtual communities by a game-theoretic model of network formation. First, link specificity is incorporated, meaning that the more direct links somebody has to maintain with others, the less she is able to specify her attention per link, so that the value of her links decreases. Second, a distinction is made between the social and informational value from communication, where informational value is transferable via indirect links, whereas social value is not. We characterize the set of pairwise stable structures in the case with only social value to indicate the separate impact of link specificity and demonstrate that it includes a wide range of non-standard architectures under large link specificity and particular combinations of fully connected components under low link specificity. In the case with both social and informational value, the joint effect of link specificity and value transferability is shown to reduce the pairwise stable set to particular fragmented architectures under large link specificity or rather to the complete network under small link specificity.

Suggested Citation

  • Harmsen - van Hout, Marjolein J.W. & Herings, P. Jean-Jacques & Dellaert, Benedict G.C., 2010. "The Structure of Online Consumer Communication Networks," FCN Working Papers 3/2010, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN).
  • Handle: RePEc:ris:fcnwpa:2010_003
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    References listed on IDEAS

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    1. Sudipta Sarangi & H. Haller, 2003. "Nash Networks with Heterogeneous Agents," Departmental Working Papers 2003-06, Department of Economics, Louisiana State University.
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    Cited by:

    1. Bellmann, Enno & Lang, Joachim & Madlener, Reinhard, 2010. "Cost Evaluation of Credit Risk Securitization in the Electricity Industry: Credit Default Acceptance vs. Margining Costs," FCN Working Papers 13/2010, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN), revised May 2011.
    2. Dergiades, Theologos & Madlener, Reinhard & Christofidou, Georgia, 2012. "The Nexus between Natural Gas Spot and Futures Prices at NYMEX: Do Weather Shocks and Non-Linear Causality in Low Frequencies Matter?," FCN Working Papers 17/2012, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN), revised Sep 2013.
    3. Gaudeul, Alexia & Giannetti, Caterina, 2011. "The role of reciprocation in social network formation, with an application to blogging," MPRA Paper 34094, University Library of Munich, Germany.
    4. Melchior, Tobias & Madlener, Reinhard, 2012. "Economic evaluation of IGCC plants with hot gas cleaning," Applied Energy, Elsevier, vol. 97(C), pages 170-184.
    5. Achtnicht, Martin, 2010. "Do environmental benefits matter? A choice experiment among house owners in Germany," ZEW Discussion Papers 10-094, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    6. Bernstein, Ronald & Madlener, Reinhard, 2011. "Responsiveness of Residential Electricity Demand in OECD Countries: A Panel Cointegation and Causality Analysis," FCN Working Papers 8/2011, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN).
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    12. Harmsen - van Hout, Marjolein & Ghosh, Gaurav & Madlener, Reinhard, 2013. "The Impact of Green Framing on Consumers’ Valuations of Energy-Saving Measures," FCN Working Papers 7/2013, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN).
    13. Ernst, Christian-Simon & Hackbarth, André & Madlener, Reinhard & Lunz, Benedikt & Sauer, Dirk Uwe & Eckstein, Lutz, 2010. "Battery Sizing for Serial Plug-in Hybrid Vehicles: A Model-Based Economic Analysis for Germany," FCN Working Papers 14/2010, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN), revised Jun 2011.
    14. Rohlfs, Wilko & Madlener, Reinhard, 2011. "Multi-Commodity Real Options Analysis of Power Plant Investments: Discounting Endogenous Risk Structures," FCN Working Papers 22/2011, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN).
    15. Harmsen - van Hout, Marjolein & Ghosh, Gaurav & Madlener, Reinhard, 2013. "An Evaluation of Attribute Anchoring Bias in a Choice Experimental Setting," FCN Working Papers 6/2013, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN).
    16. Kraas, Birk & Schroedter-Homscheidt, Marion & Pulvermüller, Benedikt & Madlener, Reinhard, 2011. "Economic Assessment of a Concentrating Solar Power Forecasting System for Participation in the Spanish Electricity Market," FCN Working Papers 12/2011, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN).
    17. Rohlfs, Wilko & Madlener, Reinhard, 2010. "Cost Effectiveness of Carbon Capture-Ready Coal Power Plants with Delayed Retrofit," FCN Working Papers 8/2010, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN), revised Dec 2010.

    More about this item

    Keywords

    Consumers; Virtual Communities; Bilateral Communication Links; Social vs. Informational Value; Specificity; Transferability; Network Formation; Game Theory;

    JEL classification:

    • A14 - General Economics and Teaching - - General Economics - - - Sociology of Economics
    • C79 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Other
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing

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