Identifying Influential and Susceptible Individuals in Social Networks: Evidence from a Randomized Experiment

1 Summary: Perhaps the two most important and elusive questions at the heart of viral marketing today are when is peer-to-peer influence mobilized and who are the influentials that most effectively mobilize and propagate influence in networks and society? Answers to these questions are critical to the success of viral marketing campaigns and for understanding how behavioral contagions spread through social networks. Unfortunately, the econometric identification of peer influence and social contagion is non-trivial, making influence identification difficult in observational data. We therefore conduct a large scale randomized experiment involving millions of subjects on the popular social networking website Facebook.com to identify influence, and the characteristics of influential and susceptible individuals involved in the peer-to-peer spread of a commercial grade movie application. By activating a viral feature on the application that generates notifications of a user’s activities to their social network peers and then randomizing receipt of the viral messages among peers, we create random assignment to treatment and control groups. We then estimate contagion models with random assignment of the receipt of potentially influential peer-to-peer viral messages. Ou