Exploiting Social Influence in Networks

We study mechanisms that exploit social influence in networks to coordinate agents to act. Agents’ social benefit from taking action increases with any additional friend who acts. On top of the social benefits, the principal offers external rewards to sustain a unique Nash equilibrium where everyone acts. We first show that in the influence mechanism that minimizes the principal’s expenses, popular agents receive preferential treatment from the principal. We use this observation to identify networks that are most favorable for the principal to induce action. Such networks, “galaxies”, partition nodes into core and periphery, with every core node being linked to all nodes, and every periphery node being linked only to core nodes. We discuss the relevance of this finding to social media platforms (such as Facebook and Twitter) in terms of manipulating the network, as well as to regulators who would attempt to prevent such manipulation.

Joint with Vlad Nora.