Abstract

http://ssrn.com/abstract=2258864
 


 



Selection Effects in Online Sharing: Consequences for Peer Adoption


Sean J. Taylor


New York University (NYU) - Leonard N. Stern School of Business

Eytan Bakshy


Facebook

Sinan Aral


Massachusetts Institute of Technology (MIT) - Sloan School of Management

April 30, 2013

14th ACM Conference on Electronic Commerce, June 16-20, 2013, University of Pennsylvania, Philadelphia PA

Abstract:     
Most models of social contagion take peer exposure to be a corollary of adoption, yet in many settings, the visibility of one's adoption behavior happens through a separate decision process. In online systems, product designers can define how peer exposure mechanisms work: adoption behaviors can be shared in a passive, automatic fashion, or occur through explicit, active sharing. The consequences of these mechanisms are of substantial practical and theoretical interest: passive sharing may increase total peer exposure but active sharing may expose higher quality products to peers who are more likely to adopt.

We examine selection effects in online sharing through a large-scale field experiment on Facebook that randomizes whether or not adopters share Offers (coupons) in a passive manner. We derive and estimate a joint discrete choice model of adopters' sharing decisions and their peers' adoption decisions. Our results show that active sharing enables a selection effect that exposes peers who are more likely to adopt than the population exposed under passive sharing. We decompose the selection effect into two distinct mechanisms: active sharers expose peers to higher quality products, and the peers they share with are more likely to adopt independently of product quality. Simulation results show that the user-level mechanism comprises the bulk of the selection effect. The study's findings are among the first to address downstream peer effects induced by online sharing mechanisms, and can inform design in settings where a surplus of sharing could be viewed as costly.

Number of Pages in PDF File: 16

Keywords: experimentation, viral marketing, information diffusion, social advertising, econometrics

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Date posted: May 2, 2013 ; Last revised: August 22, 2014

Suggested Citation

Taylor, Sean J. and Bakshy, Eytan and Aral, Sinan, Selection Effects in Online Sharing: Consequences for Peer Adoption (April 30, 2013). 14th ACM Conference on Electronic Commerce, June 16-20, 2013, University of Pennsylvania, Philadelphia PA. Available at SSRN: http://ssrn.com/abstract=2258864 or http://dx.doi.org/10.2139/ssrn.2258864

Contact Information

Sean J. Taylor (Contact Author)
New York University (NYU) - Leonard N. Stern School of Business ( email )
44 West 4th Street
New York, NY NY 10012
United States
Eytan Bakshy
Facebook ( email )
1601 Willow Rd
Menlo Park, CA 94025
United States
Sinan Aral
Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )
77 Massachusetts Ave.
E62-416
Cambridge, MA 02142
United States
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