Mihaela van der Schaar - Strategic Content Production and Link Formation in Online Communities

Online social networks provide a popular, cost-effective and scalable framework for sharing user-generated content or services. However, the self-interest of users of such networks generates intrinsic incentive problems. The body of work from which this talk derives addresses these incentive problems from several points of view. This particular talk begins by analyzing the trade-offs (to each individual agent) between the costs and benefits of forming links to collect information (from other agents) and the costs and benefits of producing information personally, and the strategic implications of these trade-offs. A central point of the analysis is that information is assumed to be heterogeneous (rather than homogeneous as in previous analyses) and that agents value this heterogeneity. The analysis has implications for the topology that emerges endogenously. For large populations, the implication is that the topology is necessarily of a core-periphery type: hub agents (at the core of the network) produce and share most of the information, while spoke agents (at the periphery of the network) derive most of their information from hub agents, producing little of it themselves. As the population becomes larger, the number of hub agents and the total amount of information produced grow in proportion to the total population. These 'scale-free' conclusions had been conjectured for many networks ¨C such as the World-Wide-Web ¨C but not derived in any formal framework, and are in stark contradiction to the 'law of the few' that had been established in previous work (e.g. by Goyal et al), under the assumption that information is homogeneous and part of the endowment of agents, rather than heterogeneous and produced.