Journal
MANAGEMENT SCIENCE
Volume 59, Issue 6, Pages 1425-1443Publisher
INFORMS
DOI: 10.1287/mnsc.1110.1648
Keywords
marketing; user-generated content; social networks; monotone treatment response; monotone treatment selection; monotone instrumental variables; homophily; endogenous group formation; correlated unobservables; endogeneity
Funding
- NET Institute
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We exploit changes in wind speeds at surfing locations in Switzerland as a source of variation in users' propensity to post content about their surfing activity on an online social network. We exploit this variation to test whether users' online content-generation activity is codetermined with their social ties. Economically significant effects of this type can produce positive feedback that generates local network effects in content generation. When quantitatively significant, the increased content and tie density arising from the network effect induces more visitation and browsing on the site, which fuels growth by generating advertising revenue. We find evidence consistent with such network effects.
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