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The structure of online consumer communication networks

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  • Harmsen - van Hout, M.J.W.

    (Marketing & Supply Chain Management)

  • Herings, P.J.J.

    (Microeconomics & Public Economics)

  • Dellaert, B.G.C.

    (Marketing & Supply Chain Management)

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.
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Suggested Citation

  • Harmsen - van Hout, M.J.W. & Herings, P.J.J. & Dellaert, B.G.C., 2006. "The structure of online consumer communication networks," Research Memorandum 028, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
  • Handle: RePEc:unm:umamet:2006028
    DOI: 10.26481/umamet.2006028
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    References listed on IDEAS

    as
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    More about this item

    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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