The Emergence of Opinion Leaders in a Networked Online Community: A Dyadic Model with Time Dynamics and a Heuristic for Fast Estimation

Management Science, Forthcoming

33 Pages Posted: 4 Mar 2010 Last revised: 28 Jan 2013

Yingda Lu

Rensselaer Polytechnic Institute (RPI)

Kinshuk Jerath

Columbia University - Columbia Business School

Param Vir Singh

Carnegie Mellon University - David A. Tepper School of Business

Date Written: October 10, 2012

Abstract

We study the drivers of the emergence of opinion leaders in a networked community where users share information with each other. Our specific setting is that of Epinions.com, a website dedicated to user-generated product reviews. Epinions.com employs a novel mechanism in which every member of the community can include other members, whose reviews she trusts, in her “web of trust.” This leads to the formation of a network of trust among reviewers with high in-degree individuals being the opinion leaders. Accordingly, we study the emergence of opinion leaders in this community using a network formation paradigm. We model network growth by using a dyad-level proportional hazard model with time-varying covariates. To estimate this model, we use Weighted Exogenous Sampling with Bayesian Inference (WESBI), a methodology that we develop for fast estimation of dyadic models on large network datasets.

We find that, in the Epinions network, both the widely-studied “preferential attachment” effect based on the existing number of inlinks (i.e., a network-based property of a node) and the number and quality of reviews written (i.e., an intrinsic property of a node) are significant drivers of new incoming trust links to a reviewer (i.e., inlinks to a node). Interestingly, time is an important moderator of these effects — the number of recent reviews written has a stronger effect than the effect of the number of recent inlinks received on the current rate of attracting inlinks; however, the aggregate number of reviews written in the past has no effect, while the aggregate number of inlinks obtained in the past has a significant effect on the current rate of attracting inlinks. This leads to the novel and important implication that, in a network growth setting, intrinsic node characteristics are a stronger short-term driver of additional inlinks, while the preferential attachment effect has a smaller impact but it persists for a longer time. We discuss the managerial implications of our results for the design and organization of online review communities.

The Online Technical Appendix for this paper is available at the following URL: http://ssrn.com/abstract=2206016

Keywords: user-generated content, opinion leaders, social networks, network growth, proportional hazard model, weighted exogenous sampling

JEL Classification: M30, M31

Suggested Citation

Lu, Yingda and Jerath, Kinshuk and Singh, Param Vir, The Emergence of Opinion Leaders in a Networked Online Community: A Dyadic Model with Time Dynamics and a Heuristic for Fast Estimation (October 10, 2012). Management Science, Forthcoming. Available at SSRN: https://ssrn.com/abstract=1562245 or http://dx.doi.org/10.2139/ssrn.1562245

Yingda Lu

Rensselaer Polytechnic Institute (RPI) ( email )

Troy, NY 12180
United States

Kinshuk Jerath

Columbia University - Columbia Business School ( email )

3022 Broadway
New York, NY 10027
United States

Param Vir Singh (Contact Author)

Carnegie Mellon University - David A. Tepper School of Business ( email )

5000 Forbes Avenue
Pittsburgh, PA 15213-3890
United States
412-268-3585 (Phone)

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