Do Online Social Networks Increase Welfare
Social Science Research Network(2014)
摘要
We consider a strategic online social network that controls information ows between agents in a social learning setting. Agents on the network select among products of competing rms of unknown quality. The network sells advertising to rms. We consider display advertising, which is standard rm-to-consumer advertising, and social advertising, in which agents who purchased that rm’s product are highlighted to their friends. We show that in equilibrium, information is unbiased relative to a setting with no advertising. However, the network reduces the information agents see about others’ purchases, since this increases advertising revenue. Hence consumer welfare is lower than in the rst-best.
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关键词
advertising,social networks
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