Optimal Network Design for Inducing Effort

41 Pages Posted: 9 Jun 2016 Last revised: 22 Jul 2018

See all articles by Pinar Yildirim

Pinar Yildirim

University of Pennsylvania - The Wharton School

Yanhao Wei

University of Southern California - Marshall School of Business

Christophe Van den Bulte

University of Pennsylvania - Marketing Department

Joy Lu

University of Pennsylvania, The Wharton School, Students

Date Written: December 15, 2017

Abstract

Many companies create and manage communities where consumers observe and exchange information about the effort expended by other consumers. Such communities are especially popular in the areas of fitness, education, dieting, and financial savings. We study how to optimally structure such consumer communities when the objective is to maximize the total or average amount of effort expended. Using mathematical modeling and assuming peer influence through conformity, we find that the optimal network design consists of a set of disconnected or very loosely connected sub-graphs, each of which is very densely connected within. Also, each sub-community in the optimal network consists of consumers selected such that their “standalone” propensity to exert effort negatively correlates with their propensity to conform and positively correlates with their propensity to influence others.

Keywords: social networks, social conformity, goals

Suggested Citation

Yildirim, Pinar and Wei, Yanhao and Van den Bulte, Christophe and Lu, Joy, Optimal Network Design for Inducing Effort (December 15, 2017). Available at SSRN: https://ssrn.com/abstract=2791781 or http://dx.doi.org/10.2139/ssrn.2791781

Pinar Yildirim (Contact Author)

University of Pennsylvania - The Wharton School ( email )

3641 Locust Walk
Philadelphia, PA 19104-6365
United States

Yanhao Wei

University of Southern California - Marshall School of Business ( email )

701 Exposition Blvd
Los Angeles, CA 90089
United States

Christophe Van den Bulte

University of Pennsylvania - Marketing Department ( email )

700 Jon M. Huntsman Hall
3730 Walnut Street
Philadelphia, PA 19104-6340
United States

Joy Lu

University of Pennsylvania, The Wharton School, Students ( email )

3641 Locust Walk
Philadelphia, PA 19104
United States

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