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Author: Wang Xiang
Publisher:
ISBN:
Category :
Languages : en
Pages :
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In this dissertation, I provide three social network models addressing different aspects of the economy.First, I consider the issue of social network formation. Meeting with strangers and meeting with friends friends are two common patterns when observing the formation of social networks and thus are widely adopted in many statistical network formation settings. I establish a network formation model trying to find the individual level incentive behind the two patterns. Each agent enters the network sequentially choosingbetween forming global random links or connecting with friends' friends, knowing that his payoff depends on the distance between the player with valuable information and himself. I find that the distance between players in the resulting network asymptotically follows a Weibull distribution and the link formation decision depends on how easily information can be transmitted under the network. When the transmission is relatively easy and information can be received from far away, players prefer to meet with strangers. Otherwise they prefer to connect with friends friends. The second model considers a moral hazard scenario in which a monitor must detect deviations so as to provide proper incentives to attain an efficient outcome. What if the monitor himself were to deviate after being bribed by his monitored subject? I explore a multi-agent public-good provision game in which each player prefers shirking to working in the absence of exogenous enforcement and can bribe those assigned to monitor him. I find that when players agree to cooperate in choosing an optimally designed monitoringnetwork, a core-periphery monitoring network results, with a small group of heavily monitored players who monitor all others. Under this network, a perfect Bayesian equilibrium (PBE) is supported in which shirking is prevented, bribing among players ceases and total monitoring costs are minimized. Further, the efficiency of this core-periphery structure is robust under various settings, including the dynamic spread of bribing, and under different punishments and monitoring schedules.Lastly, I consider a phenomenon of innovation adoption and diffusion. Innovations are crucial to the long run economic growth; however, not all new ideas are adopted by the majority of the society even though similar ones which appear later turn out to be commercial successes. I establish a model in which multiple potential entrants each can bring a new technology into a market with consumers connected under a social network.Technology has the character of network externality and entrants must rely on the word-of-mouth communication under the social network to promote their products. I find that high quality innovations are not guaranteed to perform better than low quality ones under the scenario and timing is a crucial determinant of their commercial performances. Low quality innovation firms are likely to enter the market whenever possible but high quality ones might strategically wait for a proper time to acquire a better market share.
Author: Wang Xiang
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Book Description
In this dissertation, I provide three social network models addressing different aspects of the economy.First, I consider the issue of social network formation. Meeting with strangers and meeting with friends friends are two common patterns when observing the formation of social networks and thus are widely adopted in many statistical network formation settings. I establish a network formation model trying to find the individual level incentive behind the two patterns. Each agent enters the network sequentially choosingbetween forming global random links or connecting with friends' friends, knowing that his payoff depends on the distance between the player with valuable information and himself. I find that the distance between players in the resulting network asymptotically follows a Weibull distribution and the link formation decision depends on how easily information can be transmitted under the network. When the transmission is relatively easy and information can be received from far away, players prefer to meet with strangers. Otherwise they prefer to connect with friends friends. The second model considers a moral hazard scenario in which a monitor must detect deviations so as to provide proper incentives to attain an efficient outcome. What if the monitor himself were to deviate after being bribed by his monitored subject? I explore a multi-agent public-good provision game in which each player prefers shirking to working in the absence of exogenous enforcement and can bribe those assigned to monitor him. I find that when players agree to cooperate in choosing an optimally designed monitoringnetwork, a core-periphery monitoring network results, with a small group of heavily monitored players who monitor all others. Under this network, a perfect Bayesian equilibrium (PBE) is supported in which shirking is prevented, bribing among players ceases and total monitoring costs are minimized. Further, the efficiency of this core-periphery structure is robust under various settings, including the dynamic spread of bribing, and under different punishments and monitoring schedules.Lastly, I consider a phenomenon of innovation adoption and diffusion. Innovations are crucial to the long run economic growth; however, not all new ideas are adopted by the majority of the society even though similar ones which appear later turn out to be commercial successes. I establish a model in which multiple potential entrants each can bring a new technology into a market with consumers connected under a social network.Technology has the character of network externality and entrants must rely on the word-of-mouth communication under the social network to promote their products. I find that high quality innovations are not guaranteed to perform better than low quality ones under the scenario and timing is a crucial determinant of their commercial performances. Low quality innovation firms are likely to enter the market whenever possible but high quality ones might strategically wait for a proper time to acquire a better market share.
Author: Sanjeev Goyal
Publisher: Princeton University Press
ISBN: 140082916X
Category : Business & Economics
Languages : en
Pages : 303
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Book Description
Networks pervade social and economic life, and they play a prominent role in explaining a huge variety of social and economic phenomena. Standard economic theory did not give much credit to the role of networks until the early 1990s, but since then the study of the theory of networks has blossomed. At the heart of this research is the idea that the pattern of connections between individual rational agents shapes their actions and determines their rewards. The importance of connections has in turn motivated the study of the very processes by which networks are formed. In Connections, Sanjeev Goyal puts contemporary thinking about networks and economic activity into context. He develops a general framework within which this body of research can be located. In the first part of the book he demonstrates that location in a network has significant effects on individual rewards and that, given this, it is natural that individuals will seek to form connections to move the network in their favor. This idea motivates the second part of the book, which develops a general theory of network formation founded on individual incentives. Goyal assesses the robustness of current research findings and identifies the substantive open questions. Written in a style that combines simple examples with formal models and complete mathematical proofs, Connections is a concise and self-contained treatment of the economic theory of networks, one that should become the natural source of reference for graduate students in economics and related disciplines.
Author: Fernando Vega-Redondo
Publisher: Cambridge University Press
ISBN: 9780521674096
Category : Business & Economics
Languages : en
Pages : 316
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Author: Matthew O. Jackson
Publisher: Princeton University Press
ISBN: 140083399X
Category : Business & Economics
Languages : en
Pages : 519
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Book Description
Networks of relationships help determine the careers that people choose, the jobs they obtain, the products they buy, and how they vote. The many aspects of our lives that are governed by social networks make it critical to understand how they impact behavior, which network structures are likely to emerge in a society, and why we organize ourselves as we do. In Social and Economic Networks, Matthew Jackson offers a comprehensive introduction to social and economic networks, drawing on the latest findings in economics, sociology, computer science, physics, and mathematics. He provides empirical background on networks and the regularities that they exhibit, and discusses random graph-based models and strategic models of network formation. He helps readers to understand behavior in networked societies, with a detailed analysis of learning and diffusion in networks, decision making by individuals who are influenced by their social neighbors, game theory and markets on networks, and a host of related subjects. Jackson also describes the varied statistical and modeling techniques used to analyze social networks. Each chapter includes exercises to aid students in their analysis of how networks function. This book is an indispensable resource for students and researchers in economics, mathematics, physics, sociology, and business.
Author: Tomas Rodriguez Barraquer
Publisher: Stanford University
ISBN:
Category :
Languages : en
Pages : 210
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Book Description
Over the last few decades some analytic tools intensely used by economics have produced useful insights in topics formerly in the exclusive reach of other social sciences. In particular game theory, justifiable from either a multi-person decision theoretic perspective or from an evolutionary one, often serves as a generous yet sufficiently tight framework for interdisciplinary dialogue. The three essays in this collection apply game theory to answer questions with some aspects of economic interest. The three of them have in common that they are related to topics to which other social sciences, specially sociology, have made significant contributions. While working within economics I have attempted to use constructively and faithfully some of these ideas. Chapter 1, coauthored with Xu Tan, studies situations in which a set of agents take actions in order to convey private information to an observing third party which then assigns a set of prizes based on its beliefs about the ranking of the agents in terms of the unobservable characteristic. These situations were first studied using game theoretic frameworks by Spence and Akerlof in the early seventies, but some of the key insights date back to the foundational work of Veblen. In our analysis we focus on the competitive aspect of some of these situations and cast signals as random variables whose distributions are determined by the underlying unobservable characteristics. Under this formulation different signals have inherent meanings, preceding any stable conventions that may be established. We use these prior meanings to propose an equilibrium selection criterion, which significantly refines the very large set of sequential equilibria in this class of games. In Chapter 2, coauthored with Matthew O. Jackson and Xu Tan, we study the structure of social networks that allow individuals to cooperate with one another in settings in which behavior is non-contractible, by supporting schemes of credible ostracism of deviators. There is a significant literature on the subject of cooperation in social networks focusing on the role of the network in transmitting the information necessary for the timely punishment of deviators, and deriving properties of network structures able to sustain cooperation from that perspective. Ours is one of the first efforts to understand the network restrictions that emerge purely from the credibility of ostracism, carefully considering the implications that the dissolution of any given relationship may have over the sustainability of other relations in the community. In Chapter 3 I study the sets of Pure Strategy Nash equilibria of a variety of binary games of social influence under complete information. In a game of social influence agents simultaneously choose one of two possible strategies (to be inactive or be active), and the optimal choice depends on the strategies of the agents in their social environment. Different social environments and assumptions on the way in which they influence the behavior of the agents lead to different classes of games of varying degrees of tractability. In any such game an equilibrium can be described by the set of agents that are active, and the full set of equilibria can be thus represented as a collection of subsets of the set of agents. I build the analysis of each of the classes of games that I consider around the question: What collections of sets are expressible as the set of equilibria of some game in the class? I am able to provide precise answers to these questions in some of the classes studied, and in other cases just some pointers.
Author: Jeffrey Johnson
Publisher: Springer
ISBN: 3319424246
Category : Science
Languages : en
Pages : 236
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Book Description
The overall aim of this book, an outcome of the European FP7 FET Open NESS project, is to contribute to the ongoing effort to put the quantitative social sciences on a proper footing for the 21st century. A key focus is economics, and its implications on policy making, where the still dominant traditional approach increasingly struggles to capture the economic realities we observe in the world today - with vested interests getting too often in the way of real advances. Insights into behavioral economics and modern computing techniques have made possible both the integration of larger information sets and the exploration of disequilibrium behavior. The domain-based chapters of this work illustrate how economic theory is the only branch of social sciences which still holds to its old paradigm of an equilibrium science - an assumption that has already been relaxed in all related fields of research in the light of recent advances in complex and dynamical systems theory and related data mining. The other chapters give various takes on policy and decision making in this context. Written in nontechnical style throughout, with a mix of tutorial and essay-like contributions, this book will benefit all researchers, scientists, professionals and practitioners interested in learning about the 'thinking in complexity' to understand how socio-economic systems really work.
Author: Vincent Buskens
Publisher: Springer Science & Business Media
ISBN: 1402070101
Category : Business & Economics
Languages : en
Pages : 275
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Book Description
"The book is of interest to academics in various fields of economics, sociology, and political science, such as game theory, organizational behavior, social networks and rational choice theory."--BOOK JACKET.
Author: Arun Gautham Chandrasekhar
Publisher:
ISBN:
Category :
Languages : en
Pages : 210
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(cont.) substitutes for commitment. On net, savings allows individuals to smooth risk that cannot be shared interpersonally, with the largest benefits for those who are weakly connected in the network. The final chapter (co-authored with my classmates Horacio Larreguy and Juan Pablo Xandri) attempts to determine which models of social learning on networks best describe empirical behavior. Theory has focused on two leading models of social learning on networks: Bayesian and DeGroot rules of thumb learning. These models can yield greatly divergent behavior; individuals employing rules of thumb often double-count information and may not exhibit convergent behavior in the long run. By conducting a unique lab experiment in rural Karnataka, India, set up to exactly differentiate between these two models, we test which model best describes social learning processes on networks. We study experiments in which seven individuals are placed into a network, each with full knowledge of its structure. The participants attempt to learn the underlying (binary) state of the world. Individuals receive independent, identically distributed signals about the state in the first period only; thereafter, individuals make guesses about the underlying state of the world and these guesses are transmitted to their neighbors at the beginning of the following round. We consider various environments including incomplete information Bayesian models and provide evidence that individuals are best described by DeGroot models wherein they either take simple majority of opinions in their neighborhood.
Author: Ioannis Panges
Publisher: GRIN Verlag
ISBN: 3668493235
Category : Social Science
Languages : en
Pages : 14
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Book Description
Scientific Essay from the year 2016 in the subject Sociology - Basics and General, , language: English, abstract: The concept of social networks and their methods of analysis have attracted the interest and curiosity of researchers in the social sciences and behavioral sciences over the past decades. Most of this interest in analyzing social networks focuses on under-standing the relationships between social structures as well as the patterns and impacts of these relationships. Many researchers have recognized that the analysis of networks brings a new impetus to the answer of the classical research questions of sociology and behavioral sciences, giving precise formal definitions of the political, economic or social structural environment. From the point of view of the analysis of social networks, the social environment can be expressed through graphs in the relations between the interacting units.
Author: Won Hee Park
Publisher:
ISBN:
Category :
Languages : en
Pages :
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This dissertation consists of two projects, both concerned with how social networks form and how they affect economic decisions. In the first project, entitled Identifying Influential Agents in a Social Network, I define influence centrality, a new measure of influence which combines information on node and neighbor characteristics as well as information on the network structure, by building a model of friendship formation and peer effects and calculating the change in the equilibrium behavior of the network when one node changes its behavior. I apply the model to the context of smoking among middle and high school students and show that a targeted anti-smoking intervention in which a small number of influential smoking students are treated may be more efficient than a uniform program where every student in the school receives the same anti-smoking treatment. The second project, entitled Quantifying Spillovers in Network Formation Over Time, is a joint work with Sean Chu and Shankar Kalyanaraman at Facebook. The goal of the project is to separately identify and understand the relative importance of network effects and unobserved heterogeneity in a multi-period network formation model. Here, we define network effects to be the effect of the number of mutual friends on the probability of friendship and assume that unobserved heterogeneity is time-consistent. We estimate the model on a de-identified panel data set from a small group of users on Facebook and find that both network effects and unobserved heterogeneity are statistically and economically significant predictors of friendship formation on Facebook. We further re-estimate the model first, without network effects and next, without unobserved heterogeneity. Comparing the results from these specifications, we find that network effects play a more important role than unobserved heterogeneity in network formation models on Facebook.
