SMU SOE Seminar (Aug 24, 2017), 11-12:30pm: Enhancing Dual Activities in a Social Network

In a variety of situations, an agent can exert two types of activities that are 'dual'. On an Internet forum for example, an individual can engage in two types of communication, by providing contributions on one hand and by watching the others' contributions and posting a rating, on the other. Most often there is a feedback between the two activities. For example, an agent is more inclined to provide high quality and numerous contributions the more people pay attention to them, and he is more inclined to read others' contributions the better their quality. The objective of this paper is two-fold: (1) to build a simple strategic game that exhibits this feedback and (2) to study the strategies of manager who aims at increasing an aggregate of agents' activities. In the game, agents choose both their contribution and attention intensities as a reaction to others' actions. The reaction depends on bilateral interactions, as channeled by a social network for example. The game exhibits strategic complementarities, thereby modeling the feedback between the two activities. Under a specification of the payoffs, the equilibrium is unique, in an explicit form of the individuals' characteristics and bilateral interactions. This allows for an evaluation of the optimal manager's strategies (those leading to the maximal increase in activities). The manager modifies the players' incentives, say by providing them cash or more or less information on others' actions. The value of the knowledge of the bilateral interactions structure is investigated.