Most models of social contagion take peer exposure to be a corollary of adoption, yet in many settings, the visibility of one's adoption behavior happens through a separate decision process. In online systems, product designers can define how peer exposure mechanisms work: adoption behaviors can be shared in a passive, automatic fashion, or occur through explicit, active sharing. The consequences of these mechanisms are of substantial practical and theoretical interest: passive sharing may increase total peer exposure but active sharing may expose higher quality products to peers who are more likely to adopt. We examine selection effects in online sharing through a large-scale field experiment on Facebook that randomizes whether or not adopters share Offers (coupons) in a passive manner. We derive and estimate a joint discrete choice model of adopters' sharing decisions and their peers' adoption decisions. Our results show that active sharing enables a selection effect that exposes peers who are more likely to adopt than the population exposed under passive sharing. We decompose the selection effect into two distinct mechanisms: active sharers expose peers to higher quality products, and the peers they share with are more likely to adopt independently of product quality. Simulation results show that the user-level mechanism comprises the bulk of the selection effect. The study's findings are among the first to address downstream peer effects induced by online sharing mechanisms, and can inform design in settings where a surplus of sharing could be viewed as costly.
 Similarity breeds connection. This principle—the homophily principle—structures network ties of every type, including marriage, friendship, work, advice, support, information transfer, exchange, comembership, and other types of relationship. The result is that people's personal networks are homogeneous with regard to many sociodemographic, behavioral, and intrapersonal characteristics. Homophily limits people's social worlds in a way that has powerful implications for the information they receive, the attitudes they form, and the interactions they experience. Homophily in race and ethnicity creates the strongest divides in our personal environments, with age, religion, education, occupation, and gender following in roughly that order. Geographic propinquity, families, organizations, and isomorphic positions in social systems all create contexts in which homophilous relations form. Ties between nonsimilar individuals also dissolve at a higher rate, which sets the stage for the formation of niches (localize... The authors consider processes on social networks that can potentially involve three factors: homophily, or the formation of social ties due to matching individual traits; social contagion, also known as social influence; and the causal effect of an individual’s covariates on his or her behavior or other measurable responses. The authors show that generically, all of these are confounded with each other. Distinguishing them from one another requires strong assumptions on the parametrization of the social process or on the adequacy of the covariates used (or both). In particular the authors demonstrate, with simple examples, that asymmetries in regression coefficients cannot identify causal effects and that very simple models of imitation (a form of social contagion) can produce substantial correlations between an individual’s enduring traits and his or her choices, even when there is no intrinsic affinity between them. The authors also suggest some possible constructive responses to these results. Network-based marketing refers to a collection of marketing techniques that take advantage of links between consumers to increase sales. We concentrate on the consumer networks formed using direct interactions (e.g., communications) between consumers. We survey the diverse literature on such marketing with an emphasis on the statistical methods used and the data to which these methods have been applied. We also provide a discussion of challenges and opportunities for this burgeoning research topic. Our survey highlights a gap in the literature. Because of inadequate data, prior studies have not been able to provide direct, statistical support for the hypothesis that network linkage can directly affect product service adoption. Using a new data set that represents the adoption of a new telecommunications service, we show very strong support for the hypothesis. Specifically, we show three main results: (1) Network neighbors''--those consumers linked to a prior customer--adopt the service at a rate 3--5 times greater than baseline groups selected by the best practices of the firm's marketing team. In addition, analyzing the network allows the firm to acquire new customers who otherwise would have fallen through the cracks, because they would not have been identified based on traditional attributes. (2) Statistical models, built with a very large amount of geographic, demographic and prior purchase data, are significantly and substantially improved by including network information. (3) More detailed network information allows the ranking of the network neighbors so as to permit the selection of small sets of individuals with very high probabilities of adoption.