The Market for Online Influence

• 成果类型: Article
• 署名作者: Fainmesser, Itay P.; Galeotti, Andrea
• 署名单位: Johns Hopkins University; Johns Hopkins University; University of London; London Business School
• 刊物名称: AMERICAN ECONOMIC JOURNAL-MICROECONOMICS
• ISSN/ISSBN: 1945-7669
• DOI: 10.1257/mic.20200050
• 发表日期: 2021
• 页码: 332-372
• 关键词: competition

摘要

Recent developments in social media have morphed the age-old practice of paying influential individuals for product endorsements into a multibillion dollar industry, extending well beyond celebrity sponsorships. We develop a parsimonious model in which influencers trade off the increased revenue they obtain from paid endorsements with the negative impact that these have on their followers' engagement and, therefore, on the price influencers receive from marketers. The model provides testable predictions that match suggestive evidence on pricing of paid endorsements, reveals a novel type of inefficiency that emerges in this market, and clarifies the role of search technology and advice transparency in shaping market activity. In particular, we show that recent policies that make paid endorsements more transparent can backfire, whereas an increase in the effectiveness of the search technology that matches followers to influencers has both direct and strategic positive welfare effects.