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Network Multipliers: The Optimality of Targeting Neighbors

Galeotti, Andrea and Goyal, Sanjeev (2012) 'Network Multipliers: The Optimality of Targeting Neighbors.' Review of Network Economics, 11 (3). ISSN 2194-5993

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Abstract

A firm wishes to inform a community of individuals about its product. Information travels within the community because of the social interactions between individuals. We establish that social interactions appear in a firm's payoff as a network multiplier, which is increasing both in the mean and in the variance of the distribution of connections. We then show that the degree distribution of a neighbor first order dominates the degree distribution of a node; so a firm must pick the neighbor of a node rather than a node itself as the target of communication. The advantages of employing an indirect communication strategy are greater in more dispersed networks. © 2012 De Gruyter.

Item Type: Article
Uncontrolled Keywords: Social interactions; network multiplier; targeting neighbors
Subjects: H Social Sciences > HB Economic Theory
Divisions: Faculty of Social Sciences
Faculty of Social Sciences > Economics, Department of
SWORD Depositor: Elements
Depositing User: Elements
Date Deposited: 30 Jan 2014 11:27
Last Modified: 15 Jan 2022 00:26
URI: http://repository.essex.ac.uk/id/eprint/8671

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