Peer Influence and Information Diffusion in Online Social Networks: An Empirical Analysis

Abstract:     
While peer influence in social networks has been studied for over four decades, opportunities for research have exploded with the Internet. Still, research into online social networks faces many of the same challenges discussed in the extant literature: homophily, selection problems, reflection problems, identifying the source of influence, and accounting for pre-existing knowledge. In this essay we present an approach for dissecting an archival dataset to address these challenges in the context of information diffusion in online social networks. We apply our approach to archival data collected from an online community for music and estimate the extent of information diffusion of songs or bands by peers in the network. We find that peers significantly aid diffusion: online users are six times more likely to discover new songs and three times more likely to discover new bands from peers in the network than they would have been without those peers.

Keywords: information diffusion, peer influence, new content discovery, online music community, social influence

JEL Classification: M31

working papers series