Productivity Effects of Information Diffusion in Networks
Author(s)
Aral, Sinan; Brynjolfsson, Erik; Van Alstyne, Marshall
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We examine the drivers of diffusion of information through organizations and the effects on performance. In particular, we ask: What predicts the likelihood of an individual becoming aware of a strategic piece of information, or becoming aware of it sooner? Do different types of information exhibit different diffusion patterns, and do different characteristics of social structure, relationships and individuals in turn affect access to different kinds of information? Does better access to information predict an individual’s ability to complete projects or generate revenue? We hypothesize that the dual effects of content and structure jointly predict the diffusion path of information, and ultimately performance. To test our hypotheses, we characterize the social network of a medium sized executive recruiting firm using accounting data on project co-work relationships and ten months of email traffic observed over two five month periods. We identify two distinct types of information diffusing over this network – ‘event news’ and ‘discussion topics’ – by their usage characteristics, and observe several thousand diffusion processes of each type of information from their original first use to their varied recipients over time. We then test the effects of network structure and functional and demographic characteristics of dyadic relationships on the likelihood of receiving each type of information and receiving it more quickly. Our results demonstrate that the diffusion of news, characterized by a spike in communication and rapid, pervasive diffusion through the organization, is influenced by demographic and network factors but not by functional relationships (e.g. prior co-work, authority) or the strength of ties. In contrast, diffusion of discussion topics, which exhibit more shallow diffusion characterized by ‘back-and-forth’ conversation, is heavily influenced by functional relationships and the strength of ties, as well as demographic and network factors. Discussion topics are more likely to diffuse vertically up and down the organizational hierarchy, across relationships with a prior working history, and across stronger ties, while news is more likely to diffuse laterally as well as vertically, and without regard to the strength or function of relationships. Furthermore, we find that access to information strongly predicts the number of projects completed by each individual and the amount of revenue that person generates. The effects are economically significant, with each additional “word seen” correlated with about $70 of additional revenue generated. Our findings highlight the importance of simultaneous considerations of structure and content in information diffusion studies and provide some of the first evidence on the economic importance of information diffusion in networks.
Date issued
2007-07-31Publisher
Cambridge, MA; Alfred P. Sloan School of Management. Massachusetts Institute of Technology
Series/Report no.
MIT Sloan School of Management Working Paper;4683-08MIT Center for Digital Business Working Paper;234
Keywords
Social Networks, Information Diffusion, Productivity, Information Workers