Optimal Influence Under Observational Learning

27 Pages Posted: 14 Jun 2014 Last revised: 27 Nov 2023

See all articles by Nikolas Tsakas

Nikolas Tsakas

University of Cyprus - Department of Economics

Date Written: June 14, 2014

Abstract

We study the optimal targeting problem of a firm that seeks to maximize the diffusion of a product in a society where agents learn from their neighbors. The firm can seed the product to a subset of the population and our goal is to find which the optimal subset to target is. We provide a condition that characterizes the optimal targeting strategy for any network structure. The key parameter in this condition is the agents' decay centrality, which takes into account how close an agent is to others, in a way that distant agents are weighted less than closer ones.

Keywords: Social Networks, Targeting, Diffusion, Observational Learning, Decay Centrality

JEL Classification: D83, D85, M37, H23

Suggested Citation

Tsakas, Nikolas, Optimal Influence Under Observational Learning (June 14, 2014). Available at SSRN: https://ssrn.com/abstract=2449420 or http://dx.doi.org/10.2139/ssrn.2449420

Nikolas Tsakas (Contact Author)

University of Cyprus - Department of Economics ( email )

75 Kallipoleos Street
P.O. Box 20537
1678 Nicosia
Cyprus

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