The Structure of Online Consumer Communication Networks

FCN Working Paper No. 3/2010

31 Pages Posted: 4 Jun 2010

See all articles by Marjolein J. W. Harmsen - van Hout

Marjolein J. W. Harmsen - van Hout

Lehrstuhl für Wirtschaftswissenschaften, insb. Energieökonomik; Institute for Future Energy Consumer Needs and Behavior (FCN); E.ON Energy Research Center; RWTH Aachen

P. Jean-Jacques Herings

Tilburg University

Benedict G. C. Dellaert

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE); Erasmus Research Institute of Management (ERIM)

Multiple version iconThere are 2 versions of this paper

Date Written: March 1, 2010

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.

Keywords: Consumers, Virtual Communities, Bilateral Communication Links, Social vs. Informational Value, Specificity, Transferability, Network Formation, Game Theory

JEL Classification: A14, C79, D85, M31

Suggested Citation

Harmsen - van Hout, Marjolein J. W. and Herings, P. Jean-Jacques and Dellaert, Benedict G. C., The Structure of Online Consumer Communication Networks (March 1, 2010). FCN Working Paper No. 3/2010, Available at SSRN: https://ssrn.com/abstract=1620546 or http://dx.doi.org/10.2139/ssrn.1620546

Marjolein J. W. Harmsen - van Hout (Contact Author)

Lehrstuhl für Wirtschaftswissenschaften, insb. Energieökonomik; Institute for Future Energy Consumer Needs and Behavior (FCN); E.ON Energy Research Center; RWTH Aachen ( email )

Aachen
Germany

HOME PAGE: http://www.eonerc.rwth-aachen.de/aw/cms/website/themen/~shg/fcn/lang/en/

P. Jean-Jacques Herings

Tilburg University ( email )

Department of Econometrics and Operations Research
P.O. Box 90153
Tilburg, 5000 LE
Netherlands
+31 13 4668797 (Phone)
5000 LE (Fax)

HOME PAGE: http://https://sites.google.com/view/jean-jacques-herings/home

Benedict G. C. Dellaert

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE) ( email )

P.O. Box 1738
3000 DR Rotterdam, NL 3062 PA
Netherlands

Erasmus Research Institute of Management (ERIM) ( email )

P.O. Box 1738
3000 DR Rotterdam
Netherlands

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