MLM Recruitment Network Dynamics¶
Learning Objective¶
Analyze how the structural dynamics of multi-level marketing networks — exponential recruitment, tier-stratified income distribution, and trusted-channel transmission — produce predictable patterns of widespread unsupported health claims and near-universal financial loss among lower-tier distributors.
How to Use¶
- Add Recruits — advances the network one recruitment cycle; each active distributor at the current bottom tier sponsors two new distributors.
- Propagate Claim — animates an unsupported health claim spreading from the top tier outward in three hops, turning affected node borders red.
- Show Income Flow — reverses arrows to green to visualize commissions flowing upward toward the top tier.
- Click any node — opens a side panel with that distributor's tier, recruits sponsored, estimated annual gross income (FTC-modeled), required product purchases, and resulting net income (positive or negative).
- Reset — returns to the seed network (1 top-tier + 3 tier-2 nodes).
The header counter shows total nodes and the percentage of nodes with positive net income after the $1,200/yr stylized product-purchase requirement is subtracted — typically around 25% at the seed, and falling steeply as the network grows.
Specification¶
The full specification below is extracted from Chapter 20: "Health Fraud and Misinformation".
Type: microsim
sim-id: mlm-network
Library: vis-network
Status: Specified
Interactive network visualization of MLM distributor recruitment dynamics.
Nodes represent distributors, colored by recruitment tier (top: gold, tier 2:
silver, tier 3-4: blue, tier 5+: gray). Edges represent recruitment
relationships (upline to downline). At simulation start: 1 gold node, 3 silver
nodes. Buttons: "Add Recruits" — each click grows the network one recruitment
cycle, with each active distributor recruiting 2 new distributors (stylized).
"Propagate Claim" — animates an unsupported health claim spreading through the
network from a top-tier node, showing how it reaches leaf nodes within 3 hops.
"Show Income Flow" — animates commission flows upward (green arrows), showing
that most income accumulates at upper tiers. Clicking any node shows: tier
level, total recruits sponsored, estimated annual gross income from FTC-model
distribution, and a simulated "health claim made" badge if the claim
propagation was activated. Counter in upper right shows: total nodes,
percentage of nodes with positive income (after product purchase
requirements). Canvas supports pan and zoom.