Tag Archives: social behavior

Natural experiment on public good and social behaviors

Today, suddenly I saw the latest issue of AER (SEP, 2010. How late I was!). I failed to stop myself from having a look at it, although it is already in the exam weeks. After a balance, I chose to have a brief look at this issue. It is a kind of evidence that my life has become worse - I used to at least read the content of every issue of AER, JPE, QJE every season... Now it has been such a long time that I have no access to these journals. I cannot stop myself, and I was so excited when I saw the red face of AER again. (I was also overexcited when I heard the news that LYX 2.0 is going to be released. Fantastic new features: Advanced Search, Spell-checking on the fly, Multilingual Thesaurus, Table features, Progress view and debugging pane, Instant preview inset, etc!!! Awesome! For details, just jump to http://wiki.lyx.org/LyX/NewInLyX20)

OK. Go back to AER. Two articles attracted my interests:

First one first. The first reason why I was attracted because of the words "social" "contribution" "online communities" and "field experiment". Without doubt, it reminded me of Michael Zhang's paper immediately (also, here is a brief intro in Chinese I wrote before).

Then the author. The world is so small. I just met Sherry Xin Li this spring when I was spending a month auditing courses and seminars in Tsinghua and Peking U. Her topic was "虚拟世界实验中的社会距离问题", or "Social Distance in a Virtual World Experiment". It was an interesting paper about experiments they did in the virtual world game "Second Life". Thus, it is interesting for me to see her work again, since the online market is always a market I'm paying attention to.

In this paper, she/they designed several experiments to study how the social comparison increases contributions to an online community. Here are some main results:

  • After receiving behavioral information about the median user’s total number of movie ratings, users below the median demonstrate a 530% increase in the number of monthly movie ratings, while those above the median do not necessarily decrease their ratings.
  • When given outcome information about the average user’s net benefit score, above-average users mainly engage in activities that help others.
  • Effective personalized social information can increase the level of public goods provision.

Public good is always an interesting topic for economists, perhaps due to the fact that market inefficiency/failure has always been concerned by economists.  Now I'm interested in the social behaviors. Can we actually design a mechanism to improve the supply of public goods? What are the necessary conditions for those mechanisms to function well?

Moreover, another interesting point is that how to utilize the data from the Internet. Frank has a good comment on it. I'm learning from more and more published papers to see where are the pitfalls.

OK, go to the second paper. The law of the few stresses an empirical phenomenon: in social groups a very small subset of individuals invests in collecting information while the rest of the group invests in forming connections with this select few. The interesting thing here is that someone prefer to invest in information while the rest invest in forming connections (Which type I am? Both???Haha~)

It is a kind of traditional social network application, and a little old (the working paper version I found was written in 2007, now it is 2010! what a long publishing cycle!). The authors talked about the structure of social network, and of course, network game. The meaningful suggestion for policy makers (either government or advertisement makers) is that

by collecting information about the communication network, for example by asking a subset of the community members to report “with whom they talk to” about a particular matter, the government can identify an opinion leader, the individual who receives most nominations. Each dollar spent on this opinion leader will then spill over to all community members.

Which have been confirmed by some of my friends who are using similar strategies in their broadcastings.

Fine... I'm thinking about my master project now so everything I'm caring about is how to apply social network to a certain field. Hopefully I can find some interesting points a few days later. But anyway, I need to pay attention to the exams. Go back to books and problems.

Social behavior VS Individual behavior

Well, recently I'm focusing on an interesting model --social network and thinking about an old issue --social behavior. The social network model is really attractive (if it can be regarded as a model, or more exactly, a theory), especially for people like me who are wondering the traditional assumptions in classical economics while trying to borrow something from other subjects, like sociology.

Using complex network as a mathematical tool, the social network model includes so many factors that cannot be described in the past. Well, I should admit here that I haven't taken any related courses yet, and all I know about sociology are inherited from some unprofessional books. I should also admit that I was really attracted by behavior economics last winter, but until now had I started to "study" it in an academic way. Maybe the reasons are pretty simple: first, I was busying applying for postgraduate study positions last winter; second, there was not a good teacher who was able to teach this course; third, I have no idea about which book (or textbook) should be chosen as an introductory one.

Well, I need some time to make it clear in my mind that how social network works. However,  I've got a much easier question yet. That is, in traditional macroeconomic models, like the Lucas' island model, when we are trying to calculate the sum of all individual's save, at most time we simply add them together, (i.e. a*N, where N is the number of population).  However, I think at least the individual's save should be regarded as a stochastic variable (e.g follows a normal distribution, or Brownian movement), so the sum should also follow a normal distribution. Well, in econometrics we do not need to worry about this question. But I wonder whether it would be valuable if we can make this small change.

In the example above, I want to figure out that the micro-foundations for macroeconomics should be dug more deeply in order to persuade readers.  Borrowing some mature conclusions from other fields, this task shall be easier. Alternatively, economists should make an effort (maybe something can be found from data) to know more about the relationships between individual behavior and social behaviors, thereby establishing a proper model to describe them. Personally speaking, the study of social network may be helpful, since different from other social science, at least it has a mathematical model...And the diffusion of information can be easily introduced into macroeconomic models in this way...WoW!