- Series Information
- The Oxford Handbook of the Economics of Networks
- List of Contributors
- Introduction to the Handbook
- Networks: A Paradigm Shift for Economics?
- Networks in Economics: A Perspective on the Literature
- The Past and Future of Network Analysis in Economics
- Games Played on Networks
- Repeated Games and Networks
- Stochastic Network Formation and Homophily
- Network Formation Games
- Links and Actions in Interplay
- Conflict and Networks
- Key Players
- Some Challenges in the Empirics of the Effects of Networks
- Econometrics of Network Formation
- Small-World Networks
- Networked Experiments
- Field Experiments, Social Networks, and Development
- Networks in the Laboratory
- Diffusion in Networks
- Learning in Social Networks
- Financial Contagion in Networks
- Networks, Shocks, and Systemic Risk
- Informal Transfers in Social Networks
- Community Networks and Migration
- Social Networks and the Labor Market
- Attention in Organizations
- Models of Bilateral Trade in Networks
- Strategic Models of Intermediation Networks
- Networks in International Trade
- Targeting and Pricing in Social Networks
- Managing Social Interactions
- Economic Features of the Internet and Network Neutrality
Abstract and Keywords
This chapter analyzes the optimal use of social networks by firms that wish to diffuse new products, rely on word-of-mouth communication for advertising, or exploit consumption externalities among consumers. It focuses on two topics: the targeting of individuals to diffuse information or opinions in a social network, and the pricing at different nodes of the social network when agents experience consumption externalities. In both cases, firms take the network of social interaction as given and consider how to optimally leverage social effects to introduce new products or maximize profits .
Francis Bloch is a professor of economics at école Polytechnique.
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