The Effect of Network Diversity on Social Media Usage: Implications for Platforms and Firms

Social media platforms like Facebook, Twitter, and LinkedIn have gained tremendous popularity among consumers. This growth in usage has been met with a growth in interest among academics in fields as diverse as marketing, sociology, information science, psychology, economics, and information systems to make sense of this consumption. In this dissertation, I focus on one of the defining features of social media -- the ability to consume information that users broadcast to their entire social networks. By analyzing the database of a company that started charging its users to receive broadcasts, I demonstrate empirically that broadcasts are particularly valuable for maintaining relationships with contacts that are structurally diverse -who move in different social circles from our own.;Broadcasts thus delocalize our communication, allowing a greater proportion of our interactions to be with those who are otherwise socially distant. To explore the macro-level consequences of having more interaction with diverse contacts, I conducted an online network experiment and randomized participants into networks that vary in structural diversity. I find that information diffuses faster in diverse networks because people receive a greater variety of information and continue to engage with the platform -- consuming what is shared with them and forwarding it along to others. Furthermore, when some information was seeded more times than other information, diverse networks decreased the inequity in exposure brought upon by this imbalance.;These findings have important implications for the companies that manage social media platforms and the firms that advertise on them. First, platforms would benefit from prioritizing broadcasts from contacts that are structurally diverse. On average, users have fewer alternative routes through which to receive information about these contacts. Second, social media allow firms' messages to spread between otherwise disconnected regions of the social network. This can be particularly relevant for smaller firms, which tend to have fewer resources to seed their messages in different regions of the network. Third, firms should aim to seed their messages in diverse regions of the social network to maximize reach. Users in these regions tend to be more engaged with social media platforms.