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.
@cite_16: Models of collective behavior are developed for situations where actors have two alternatives and the costs and or benefits of each depend on how many other actors choose which alternative. The key concept is that of "threshold": the number or proportion of others who must make one decision before a given actor does so; this is the point where net benefits begin to exceed net costs for that particular actor. Beginning with a frequency distribution of thresholds, the models allow calculation of the ultimate or "equilibrium" number making each decision. The stability of equilibrium results against various possible changes in threshold distributions is considered. Stress is placed on the importance of exact distributions distributions for outcomes. Groups with similar average preferences may generate very different results; hence it is hazardous to infer individual dispositions from aggregate outcomes or to assume that behavior was directed by ultimately agreed-upon norms. Suggested applications are to riot ...
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 .