Critical Mass and Willingness to Pay for Social Networks

Speaker:	Professor Chris WESTLAND
		Head, Department of Information & Decision Sciences
		University of Illinois - Chicago

Title:		"Critical Mass and Willingness to Pay for Social
		 Networks"

Date:		Friday, 20 February, 2009

Time:		2:00pm - 3:00pm

Venue:		Room 1504 (near lift nos. 25/26)
		HKUST

Abstract:

Disagreement surrounds the formal definitions of ?critical mass? and of
the economic willingness to pay for membership in a social network. The
current paper adapts work from percolation theory to analyze the structure
of social networks, and draws an analogy for critical mass in social
networks to the concept of phase changes in materials. We show how network
growth can be actively managed, and define how to manage the willingness
to pay for membership. We show, if achieving a critical mass of members in
a social network is our objective, that prior to achieving critical mass,
(1) the probability of accepting an invitation p must vary inversely with
individuals? breadth of contacts; and (2) the number of special interest
groups of any size s will decrease exponentially in s until immediately
below critical mass. Targeted invitations facilitated through
sophisticated programs such as AdWords,  IndexTools and Google Analytics
can help to actively maximize probability of accepting an invitation. Our
model defines a willingness to pay for network membership (i.e., a network
effect) that is nearly zero below critical mass, and is an involved
function of p above critical mass whose shape appears to be close to a
logarithmic function.


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Details biogparhy is available at http://uic.edu/~westland/ for details.