Social network design for inducing effort

Pinar Yildirim, Yanhao Wei, Christophe Bulte and Joy Lu
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Yanhao Wei: University of Southern California
Christophe Bulte: University of Pennsylvania
Joy Lu: Carnegie Mellon University

Quantitative Marketing and Economics (QME), 2020, vol. 18, issue 4, No 2, 417 pages

Abstract: 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.

Keywords: Customer community design; Network design; Network optimization; Peer influence (search for similar items in EconPapers)
JEL-codes: C7 D85 D91 M31 Z13 (search for similar items in EconPapers)
Date: 2020
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DOI: 10.1007/s11129-020-09227-6

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