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The Structure of Online Consumer Communication Networks

Author

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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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    More about this item

    Keywords

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

    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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