Exploiting Social Influence in Networks
Abstract
Social media platforms like Facebook, X, and LinkedIn are gradually becoming more centralized, with almost all users’ attention diverted to “influencers.” To explain this trend, we study mechanisms that exploit social influence in networks to induce agents/social media users to take action (e.g., buying a product, voting for a presidential candidate). Agents’ social benefit from taking action increases with each additional friend who acts. On top of the social benefits, the principal offers external incentives to sustain a unique Nash equilibrium where everyone acts. We first show that in the influence mechanism that minimizes the principal’s expenses, popular agents receive preferential treatment from the principal. We use this observation to identify networks that are most favorable for the principal to induce action. Such networks, called “galaxies,” partition nodes into core and periphery, with every core node being linked to all nodes, and every periphery node being linked only to core nodes. When the set of core nodes is small the network is very centralized and the platform or its advertises can easily exploit social media to manipulate users’ decisions.
About Eyal Winter
Eyal Winter is the Silverzweig Professor of Economics at the Hebrew University and the Andrews and Elizabeth Brunner Professor of Economics at Lancaster University, specializing in Behavioral Economics, Decision-Making and Game Theory. He was awarded the Humboldt Prize for excellence in research by the German government in 2011. He is an elected council member of the International Game Theory Society, and an elected fellow of the Economic Theory Society. He held senior positions at Washington University, University of Manchester and the European University Institute, and was invited to present his research works at more than 160 universities in more than 30 countries. His book “Feeling Smart: Why our Emotions are More Rational than We Think” appeared in nine languages, and was endorsed by seven Nobel laureates. Winter published in leading journals in Economics and Social Sciences including Econometrica, AER, JPE, ReStud, APSR, TE, JET, Management Science, Psy Science. His press essays appeared in Time Magazine, Forbes, Los Angeles Times, Washington Post, Guardian, Independent, i-news, Sun, Jewish Chronicle and more. He has advised governments, corporations and NGOs on behavioral economics, game theory and decision-making.
Language : English
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