Homophily and Social Network Engagement: Evidence From a Video Gaming Platform
32 Pages Posted: 5 May 2018
Date Written: April 19, 2018
I estimate how increased similarity with one’s friends in a social network member leads one to engage further with the social network. Participation is modeled based on user utility derived both from participating in events close to their preferred “location” and from their friends’ simultaneous participation in the event. This suggests that, even after controlling for network structure, focal users will participate more as their friends’ preferences move closer to their own. These implications are tested using panel data from an online video gaming network. Homophily is measured by similarity in recent past video game playing choices. Because the data track users over time, I am able to test effects from deviations in similarity measures from week to week. Decomposing similarity measures based on whether the focal user’s, or her friends’, preferences are changing which helps to identify causal effects. The evidence supports a large increase in engagement from increased homophily. Platform managers can profitably incorporate these effects into their CRM systems.
Keywords: Homophily, Engagement, Video Games
JEL Classification: D85, M31, L96
Suggested Citation: Suggested Citation