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The Power of Product Recommendation Networks

We all know that colds, the flu, and other diseases are contagious. They spread from one person to another, with different individuals displaying varying degrees of susceptibility. Similarly, ideas and information can be contagious. Online social networks like Facebook and Twitter amplify the spread of concepts and content — sometimes to such a degree that they’re said to be “going viral.” This phenomenon can play a role in marketing, as customers spread awareness of and interest in products through word-of-mouth interactions.

Such social interactions form the basis for network-based demand shifts for specific products. However, today’s platforms can also enable demand to spread across different and potentially competing products. Online retail platforms like Amazon.com provide product recommendations, noting, for instance, on the landing page of Product A that people who bought Product A also bought Product B. Such recommendations define what we call a copurchase network of products connected by shared purchasing behaviors. As users click from one product to the next, attention flows from one product page to the next, causing the network to become a potential channel for redistributing demand across brands. Think of this phenomenon as the virtual aisle structure of the online storefront.

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