Productivity Effects of Information Diffusion in Networks
Massachusetts Institute of Technology (MIT) - Sloan School of Management
Massachusetts Institute of Technology (MIT) - Sloan School of Management; National Bureau of Economic Research (NBER)
Marshall W. Van Alstyne
Boston University - Department of Management Information Systems; Massachusetts Institute of Technology (MIT) - Sloan School
May 18, 2007
We examine what drives the diffusion of different types of information through email networks and the effects of these diffusion patterns on the productivity and performance of information workers. In particular, we ask: What predicts the likelihood of an individual becoming aware of a strategic piece of information, or becoming aware of it sooner? Do different types of information exhibit different diffusion patterns, and do different characteristics of social structure, relationships and individuals in turn affect access to different kinds of information? Does better access to information predict an individual's ability to complete projects or generate revenue? We characterize the social network of a medium sized executive recruiting firm using accounting data on project co-work relationships and ten months of email traffic. We identify two distinct types of information diffusing over this network - 'event news' and 'discussion topics' - by their usage characteristics, and observe several thousand diffusion processes of each type of information. We find the diffusion of news, characterized by a spike in communication and rapid, pervasive diffusion through the organization, is influenced by demographic and network factors but not by functional relationships (e.g. prior co-work, authority) or the strength of ties. In contrast, diffusion of discussion topics, which exhibit shallow diffusion characterized by 'back-and-forth' conversation, is heavily influenced by functional relationships and the strength of ties, as well as demographic and network factors. Discussion topics are more likely to diffuse vertically up and down the organizational hierarchy, across relationships with a prior working history, and across stronger ties, while news is more likely to diffuse laterally as well as vertically, and without regard to the strength or function of relationships. We also find access to information strongly predicts project completion and revenue generation. The effects are economically significant, with each additional 'word seen' correlated with about $70 of additional revenue generated. Our findings provide some of the first evidence of the economic significance of information diffusion in email networks.
Number of Pages in PDF File: 26
Keywords: Networks, Information Diffusion, Productivity, Email
JEL Classification: D83, J24, L22, M20
Date posted: May 21, 2007
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