On Stars and Galaxies: Exploiting Social Influence in Networks

Abstract:

A principal wishes to induce an action from agents that belong to a social network. Agents’ social benefit from taking the action increases with any additional friend who acts. On top of the social benefits, the principal offers external rewards in order to sustain a unique Nash equilibrium where everyone acts. We first show that in the influence mechanism that minimises the principal’s expenses, popular agents receive a preferential treatment from the principal. Using this observation, we identify networks that are most favourable for the principal to induce action. Such networks, “galaxies”, partition nodes into stars and periphery, with every star being linked to all nodes, and every periphery node being linked only to stars. 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 manipulations.

Keywords: social networks, mechanism design, unique implementation

Joint with Vlad Nora

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