We present an analysis of a person-to-person recommendation network, consisting of 4 million people who made 16 million recommendations on half a million products. We observe the propagation of recommendations and the cascade sizes, which we explain by a simple stochastic model. We analyze how user behavior varies within user communities defined by a recommendation network. Product purchases follow a ‘long tail’ where a significant share of purchases belongs to rarely sold items. We establish how the recommendation network grows over time and how effective it is from the viewpoint of the sender and receiver of the recommendations. While on average recommendations are not very effective at inducing purchases and do not spread very far, we present a model that successfully identifies communities, product, and pricing categories for which viral marketing seems to be very effective.
Diffusion models that try to model the process of adoption of an idea or a product can generally be divided into two groups: Threshold model @cite_16 where each node in the network has a threshold @math , typically drawn from some probability distribution. We also assign connection weights @math on the edges of the network. A node adopts the behavior if a sum of the connection weights of its neighbors that already adopted the behavior (purchased a product in our case) is greater than the threshold: @math .
@cite_16
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In this paper we consider a fundamental problem in the area of viral marketing, called T ARGET S ET S ELECTION problem. In a a viral marketing setting, social networks are modeled by graphs with potential customers of a new product as vertices and friend relationships as edges, where each vertex @math is assigned a threshold value @math . The thresholds represent the different latent tendencies of customers (vertices) to buy the new product when their friend (neighbors) do. Consider a repetitive process on social network @math where each vertex @math is associated with two states, active and inactive, which indicate whether @math is persuaded into buying the new product. Suppose we are given a target set @math . Initially, all vertices in @math are inactive. At time step 0, we choose all vertices in @math to become active. Then, at every time step @math , all vertices that were active in time step @math remain active, and we activate any vertex @math if at least @math of its neighbors were active at time step @math . The activation process terminates when no more vertices can get activated. We are interested in the following optimization problem, called T ARGET S ET S ELECTION : Finding a target set @math of smallest possible size that activates all vertices of @math . There is an important and well-studied threshold called strict majority threshold, where for every vertex @math in @math we have @math and @math is the degree of @math in @math . In this paper, we consider the T ARGET S ET S ELECTION problem under strict majority thresholds and focus on three popular regular network structures: cycle permutation graphs, generalized Petersen graphs and torus cordalis.