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Network multipliers: The optimality of targeting neighbors

Galeotti, A and Goyal, S (2012) 'Network multipliers: The optimality of targeting neighbors.' Review of Network Economics, 11 (3). ISSN 1446-9022

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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
Subjects: H Social Sciences > HB Economic Theory
Divisions: Faculty of Social Sciences > Economics, Department of
Depositing User: Jim Jamieson
Date Deposited: 30 Jan 2014 11:27
Last Modified: 06 Aug 2019 23:15

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