Service interruption on Monday 11 July from 12:30 to 13:00: all the sites of the CCSD (HAL, EpiSciences, SciencesConf, AureHAL) will be inaccessible (network hardware connection).
Skip to Main content Skip to Navigation
Journal articles

A trick of the tail: the role of social networks in shaping distributional properties of experience-good markets

Abstract : The diffusion of social media has radically changed the number of peers with whom consumers interact with when making a decision. While consumption decisions depend on many factors, such as prices, qualities, distribution channels, and marketing, in this article, we study the effects of a single aspect: the role of the number of social connections in shaping consumers’ decisions. We present an agent-based simulation model where virtual consumers respond solely to information provided by peers from their social network. We obtain that increasing the number of connections consumers rely upon to gather information changes radically the distributional properties of markets where consumers cannot obtain direct information about the available options, such as experience goods. In particular, we show that increasing the number of connections among consumers increases the concentration of the top- and low-end market share options, sharply decreasing the number of “midsized” options. This effect is in line with evidence from markets for movies and music, which rely heavily on information gathered through peers.
Document type :
Journal articles
Complete list of metadata

https://hal-sciencespo.archives-ouvertes.fr/hal-03403594
Contributor : Spire Sciences Po Institutional Repository Connect in order to contact the contributor
Submitted on : Tuesday, October 26, 2021 - 11:35:39 AM
Last modification on : Thursday, July 7, 2022 - 4:59:34 AM

Identifiers

Citation

Zakaria Babutsidze, Marco Valente. A trick of the tail: the role of social networks in shaping distributional properties of experience-good markets. Industrial and Corporate Change, Oxford University Press (OUP), 2019, 28 (3), pp.459-475. ⟨10.1093/icc/dty021⟩. ⟨hal-03403594⟩

Share

Metrics

Record views

13