Influencer Networks

52 Pages Posted: 29 Mar 2024

See all articles by Yanlin Chen

Yanlin Chen

Nanjing Audit University

Xueheng Li

Lingnan College, Sun Yat-sen University

Tianle Song

Wenlan School of Business, Zhongnan University of Economics and Law

Date Written: February 28, 2024

Abstract

This paper examines the formation of influencer networks in user-generated content markets. Players decide whether to produce content, its quality, and whom to follow. Each strict equilibrium network is a nested upward-linking network where different levels of influencers can co-exist, with those at higher tiers providing higher-quality content and being followed by players in all lower tiers. Under a wide range of parameters, all payoff-dominant strict equilibria conform to the law of the vital few: a small yet significant proportion of players produce all the content. However, unlike previous models where the number of influencers is limited and their proportion diminishes rapidly to zero, the complementarity between influence and content provision causes the number of influencers to grow indefinitely with the population. For sufficiently large populations, a single nested upward-linking network connecting all players can emerge, even when players have heterogeneous preferences over content categories.

Keywords: User-generated content networks, network formation, influencers, the law of the vital few

JEL Classification: D83, D85, Z13

Suggested Citation

Chen, Yanlin and Li, Xueheng and Song, Tianle, Influencer Networks (February 28, 2024). Available at SSRN: https://ssrn.com/abstract=4744210 or http://dx.doi.org/10.2139/ssrn.4744210

Yanlin Chen

Nanjing Audit University ( email )

86 Yushan West Road
Nanjing, Jiangsu 210017
China

Xueheng Li (Contact Author)

Lingnan College, Sun Yat-sen University ( email )

GuangZhou, GuangDong
China

Tianle Song

Wenlan School of Business, Zhongnan University of Economics and Law ( email )

No. 182 Nanhu Avenue
Wuhan, Hubei 430073
China

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