Any smart (and not so smart) ideas are welcome! Think about Facebook, Research Gate, etc. What are the individual and social benefits of participants? Are there scale economies? What is the interest of providers?
Dear @Yuri, I do not agree. Researchgate makes a lot of advertising!
First of all, I do not think that there exists a well developed theory in economics about this issue (like Arrow-Debreu theory of general equilibrium).
Second, I know a bit about economics of small forums. Owner of a platform to discuss different ideas between about 100-200 people had annual costs of order several hundred dollars (apart from his labor) and needed to attract small advertisement for compensation. It was a difficulty for survival, while Facebook obviously does not have this problem. This means that scale economies matter.
Third, is there only advertising behind the profits? In fact, every member of Facebook can do his small advertising (like "I do these or that services to people") just for free.
Fourth, Research Gate (contrary to Facebook) does not make advertising and (contrary to Academia) it does not ask for fees from participants. It does a lot of social benefits. We do not know if any social benefactor donates to make public good. Can there be some private interest? For example, development of high scale Artificial Intelligence on the basis of pooling global scientific knowledge?
Dear @Yuri, I do not agree. Researchgate makes a lot of advertising!
Dear Hamit, the link you recommend is interesting. But I am aware about physical approach to networks. The good book is by Duncan Watts "Six degrees of separation"- it is how far we are, on average, let say, from US president. About network topology - "small world" or free scale... Physicists and mathematicians are interested in scales of random network, the length of the largest chain, etc.
Bargaining on network is another hot economic research. But one cannot go analytically to real networks of high complexity. But they do not try to investigate profitability of Facebook and microeconomics of it. Well, maybe there is a private research, not for public...
Dear Alexander, I am glad that you find it interesting, especially the last sentence. Frankly speaking, I expect to hear more, also from people participating in AI development. I think that it is not necessarily socially beneficial, especially in bad private hands...
Dear Ljubomir, it is not a problem that researchers advertise (maybe job openings or their works). They do not make money directly from that. Contrary to big firms with aggressive advertising on other networks. As for RG ads, can you give me an example?
Alexander, on one hand, we can relax because "AI will not soon have a chance to reason seriously". On the other hand, you mention "telepathic weapons"... Well, I think the existence of telepathic is considered to be not a science, because we do not have models of "what field is doing what" and how... Just perhaps experiments with several extrasensitive people... Either the topic is too closed, or it is not a science. Some people also reject astrology, but I think that it is useful, like many other "sciences" that are not officially recognized.
But let us use some logic. What a good AI can do if it has an access to RG database? Here we are all limited with narrow knowledge (only in profession) and lack of incentives for interdisciplinary research... Can AI do better than we? Given mass ignorance of scientists in interdisciplinary knowledge, probably yes. Speed will allow for many combinations, and some could lead to top inventions. The only problem is to filter out a mass of stupid ideas of AI. And these inventions can also be used against us. If there is no public control over AI... It may look like scientific fantasy, but better if we are aware.
Dear Prof Dr Yuri Yegorov,
I found your explanation has some strong logic and also interesting to read.
Dear Hom and Kulvir, please add your ideas too. Even if it is your first thought about the subject. We are doing brainstorming and not putting grades.
Dear Alexander, I have to admit that you have brought me to the edge of my ignorance. I checked for BBI: https://en.wikipedia.org/wiki/Brain%E2%80%93brain_interface . Wiki says that now it is done only for some animals. Indeed, ants seems to self-organize in a common job without visible communication. There are esoteric theories about such abilities (telepatic) about humans, that later have been lost. Can you send me a signal without writing so that I will read it? But even if there are some physical fields, that some humans can read, there is (perhaps) no chance for AI to read it, because it captures only printed information.
P.S. Well, good to hear esoteric ideas, but are there more economic comments about networks? Also, what AI can do now, will do in few years and will never be able to do?
We, the common people are the subject of business of many groups, businessman etc.
RG is perhaps getting some money from my activity using internet.
O.K. I do not mind for that payment, as I am getting some good things from RG!
Like electronic and print media, social media makes money through advertisement. The more activity it has within its networks and the more people using it, the more companies want to advertise their services and products with them. Companies use social networks for marketing purposes and understanding/influencing consumer behaviour. Although, social media has made it possible for the user to keep in touch with people located thousands of miles away, these virtual platforms also see users as a product. Users’ Information electronically available on social media sites relating to consumption interdependences between friends and peers, what they do, how they behave, and what products they consume is valuable for companies who wish to target certain niches of the population with their products or services.
Yuri Yegorov: I am strongly avoiding others like, e.g. Linkedin, which the first moment spied and reported to me for a collaborator of mine to whom he was in the conversation right then. Immediately, i stopped using that service.
Frankly, I am surprised at the sinister implications of what you learned about Linkedin. I also definitely agree with you that such social networks should be avoided.
Dear @Yuri, there is a lot of business marketing of different products on the right-hand side of this page right now. They named it " Ads you may be interested in ".
I do see at this very moment two companies advertisement! Links are given. As you may notice, one company has RG profile!!!
https://www.trilinkbiotech.com/cleancap/?utm_source=researchgate&utm_medium=banner&utm_campaign=cleancap
https://www.researchgate.net/institution/Dow_Chemical_Company/post/5a04755048954cb69d080d78_Evaluation_of_AFFINISOL_HPMCAS_HP_Polymers_in_Hot_Melt_Extrusion_Applications
Dear @Yuri, let me recommend an article where both Researchgate and Academia were classified as commercial ( Sells ads, job posting services ).
A social networking site is not an open access repository!
ResearchGate and Academia.edu are social networking platforms whose primary aim is to connect researchers with common interests. Users create profiles on these services, and are then encouraged to list their publications and other scholarly activities, upload copies of manuscripts they’ve authored, and build connections with scholars they work or co-author with. Essentially these services provide a Facebook or LinkedIn experience for the research community.
Both services are commercial companies. Although Academia.edu has a “.edu” URL, it isn’t run by a higher education institution. The domain name was registered before the rules that would now prohibit this use went into effect, and the address was grandfathered in and later sold to the company. On its filings with the Securities and Exchange Commission it uses the legal name Academia Inc...
Business models
Less theoretical is the likelihood of a shift in these sites’ profit strategy. ResearchGate and Academia.edu are commercial sites, whereas most open access repositories are non-profits.
These academic social networking sites have each raised large amounts of initial funding: $17.8 million for Academia.edu, and $35 million for ResearchGate. They share funders with Uber, Snapchat, and Upworthy. Academia.edu’s largest funder is in a prolonged battle with the Surfrider foundation and the California Coastal Commission over preventing public beach access. This isn’t particularly notable for a startup company, but it’s unusual for an “academic” site.
And as Kathleen Fitzpatrick recently pointed out when writing about Academia.edu, venture capital funds don’t last forever. “There are a limited number of options for the network’s future: at some point, it will be required to turn a profit, or it will be sold for parts, or it will shut down.” What are their options?
ResearchGate offers to help companies “reach the right professionals in science and research with targeted, on-page advertising.” Academia.edu hopes to be able to track what topics and articles are trending with their users and sell that information to R&D companies. [Note: subsequent to this post, Academia.edu’s CEO Richard Price told the Chronicle of Higher Education that the company is no longer planning on pursuing that idea.] Both companies host job listings, and either charge for premium placement of the job ad or the ability to list it at all.
Open access repositories, as mentioned above, usually get their funding from a host entity like a university or a government agency...
http://libguides.brunel.ac.uk/c.php?g=434400&p=2970906
I want to thank everybody for their contributions. Ljubomir's reference is interesting; now we know the budget of RG. I think that maybe some states or international organizations should allocate money for it. RG creates public good, and it is important to save it from bankruptcy and closure, on one hand, and, on another, from looking for private investment (that can sometimes be against the public interest).
We are in an interesting discussion. But I think that not all sides of this question are covered by now. Please give more opinions, also about economic mechanisms in social networks.
I recently found another question that may be interesting for some of you. It discusses AI, social networks and marketing: https://www.researchgate.net/post/What_role_will_artificial_intelligence_play_in_marketing_Will_it_change_the_way_we_approach_consumers2
But it was asked by people who work in marketing. I have expressed there my concern as well.
Web advertising is an emerging market. Allowing companies to advertise on the site is the most common way for social sites to generate revenue. Marketing experts are continuously trying to find the best way to insert advertising into the Web experience without impacting users in a negative way. Access to the enormous user base is a valuable commodity. The more popular the Web network, the more money it will be able to generate through advertising.
There are no charitable works in this area, everyone is profiting from certain ads, for the benefit of certain parties, directing and redirecting
Thanks to everybody for updates. I again recommend you to see my link above (those who have not), about how people in marketing see this (AI). Poor websites (like RG) have to rely on this, unfortunately.
Now, after looking at several questions that are near (but not exactly in) economic theory, I have a strange feeling. It seems like economic theory becomes more a dogmatic theory (like Marxism in the end of the 20th century, before it was largely abandoned) while investment (in computer science, AI, marketing, related math) starts to generate many processes, that economic theory even does not want to model and to discuss (also by rejecting smart articles if they appear). Please give me examples showing that I am wrong (if you can).
The people in marketing, AI, developers of software for nets might not even know the basics of general equilibrium, social welfare, etc. They receive a lot of private money to push research into the areas with unclear social consequences.
The problem is that classical microeconomics with its efficiency theorems is not applicable for nets. There are obvious scale effects, and this gives rise to different type of economics, with IRS (scale economies), path dependency and other effects that are not studied in classical micro textbooks. If you want to know models about that, can see Brian Arthur (1994), see https://books.google.at/books/about/Increasing_Returns_and_Path_Dependence_i.html?id=k6Vk5YZRzpEC&redir_esc=y
AI developers and marketing are using money for their own purposes. They do not see the global picture (I think nobody sees it, but we need to try) and thus are not aware where they are moving the world following private egoistic interests. It may become not only socially inefficient, but also non-reversible. I mean if we (the socium) allow for free uncontrolled development of AI and marketing.
I see the main problem as follows. There is too rapid and uncontrolled development of networks and artificial intelligence. Economic theory have not studied it yet well enough to make policy recommendations. Two reasons may be behind: the process of change is fast (due to IRS), while referee in economic theory do not like papers about something completely new (with almost no references). But when substantial theoretical literature on all socio-economic effects of network development will finally emerge (given obstacles, maybe in 5-10 years), it might be too late to change something (due to path dependency).
Interesting observations :)
Personally, I see a lot of places for the research with the hype related to social networks, AI, technology and so on, especially their influence on the individuals. Therefore, your question made me think of something...
If we think about standard economic theory, we have thought for years that people have been rational and that they would work on maximizing their utility following rational courses of action. But then again, behavioral economics hit the board with some proofs of people making irrational choices. Perhaps, the individual and social benefits of SNs might be observed through behavioral economic prism, rather then seeking the postulates in standard economic theory... Even SNs targets and strategies are hitting "irrational" parts of an individual. If you take an example of the recent Facebook action that limited the appearance of business sites on personal home feeds, the Facebook HQ explained this by saying that "they want to return to initial idea of Facebook as a place for people to share their moments with friends and maintain their personal relationships". So, if you think about it, the goal is to evoke emotions, not really a reason. Maybe this is the card they are playing with, and from the users pov, they may see it as a virtual place where they "do not feel alone" (among everything else)...
From the providers point of view, what might be tricky is how to turn the trends from "money makers" to "value creators". I think this is where we might need some control instruments, to control potential harm, especially from the ethical pov... Just something to think about :)
Thank you for great ideas and raising the question(s)!
Dear Senad, I do not understand your "not too much". Do you mean that software elaborators understand only their narrow task and know little where overall movement is going?
Dear Anida, I agree that behavioral economics has a right for existence but it is yet far from being a queen of economic thought. It is just based more on experiments and do not formulate analytical theory. But its findings based also on psychology complement economic theory.
Let me remind you two main postulates of neoclassical economic theory.
1.Each individual has different preferences and they are fixed. (My feeling is that they are given by God, family, good teachers, traditions - and that democratic society behind should defend them from attempts of bad people to change them.)
2. Each individual is rational. This means that he (she) knows all truthful information and can logically deduce everything as a perfect mathematican. (For me this implies that democratic society should put every effort to stop spreading of false information and to teach individuals how to be perfect analysers).
These assumptions are in the basis of both consumption choice in microeconomics and political choice when voting.
How the emegence of social network can change that? First of all, our friends in Facebook are now often random people (some feel impolite to reject an offer from a person one hardly knows) and everybody is influenced today not only by local culture but by the whole world. Some of "friends" can aggressively spread their views.
AI on network still cannot distinguish between true and false information. In many cases it helps us, but also can misinform us (being ignorant but aggressive in help). As for individual, network helps him with small false, like 2x2=5 (he can google that 2x2=4), but network can easily spread massive lie (especially about political events, although iinternet is often more honest than mass media) and do it fast, so people cannot meditate in silence for few days to understand that it is lie.
Firms spread marketing information, often not truthful and with an intention to change preferences. Some dealers from politics use networks for fast massive spread of their (often marginal) views. I mean that a party with 1% of potential voters can use internet smartly to incresase it substantially. Access to such technologies can manipulate voting.
Older agents (who lived also before networks) can often oppose those influences, but younger people are much more under those influences, often more than from parents and good teachers.
I have done some work on social networks, so I can try and summarize my ideas for you.
The simple fact is that social networking is not about economics, they are formed because people want to communicate, this allows for growth in these networks, whatever the end outcome. People do NOT pay to for such services.
That said, the connectivity of social network is not financially driven, itis formed to extend communication avenues between people. With the ubiquity of the Internet, the perpetual identities that reflect economic demands that are formed over the virtual world allow for companies to exploit this space to create viral campaigns meant to secure access to the network participant's long term memory.
Companies want target consumers to remember their brands.
In short, don't think about economies of scale, you need to get your strategy right - are you doing it to create economies of scale (apart from advertising, what other sources of revenue do you think will be possible, would people want to be active collaborators in this?).
My suggestion is - do it for the right reason, that is enhancing connectivity, economics will follow suit once you have got your fundamentals right. You do it for money, and money will be the first thing you'll miss out on. Social networks rely on more primal instincts, the need to connect that is found in mammals - so you need to get the purpose correct, economics will follow once these networks become large enough.
Hope this helps.
Dear @Santosh, I see that you are more specialist in networks. I am probably more in economics. Almost nobody knows all information.
You are right about psychological aspects of growing networks (also through advertising, including using AI). It arises from importance of "likes" on our mood, and now it is exploited in virtual networks. There are also mathematical properties of networks, studied for example, by Duncan Watts.
What do I mean by scale economies? If there would be no scale economies (but decreasing returns), we would end up in coexistence of thousands of networks of Facebook-type. We have millions of hotels and restaurants worldwide, and there is high competition, honest price, free entry and economic efficiency. One reason behind that is that service is location specific: if you are in New York, you cannot eat and sleep in London that day. This effect is eliminated in virtual networks.
As the result, instead of millions of small developers we got few billionaires (like Bill Gates and Zuckerberg). Now it depends on very few private opinions, where to invest those billions. They do not need to survey millions of users before taking further decisions on developing new software (here we get a natural monopoly with its economic inefficiency), what tasks to put to the developers of AI, etc. And this is a clear path dependence. We cannot go along the path that is chosen by billions, but on one chosen by few.
An interesting fact. George Soros in his speech in Davos also supports the idea of network regulation, including Facebook. See https://www.youtube.com/watch?v=WaHzUlR2MUg . But we did not communicate and came to this conclusion independently.
Perhaps we also have different reasons for that. I care more about potential violation of users' interests. I care about too much power of Zuckerberg and advertising companies over users, but want to keep all present rights of users.
Soros has a lot of money and might have his private reasons. Somebody (David James) wrote in comments to video: "He doesn't care about revenue from advertisements, he knows that the right used these platforms to destroy his plans for a new world order". Another guy (drftpk) wrote: " He wants them regulated to squash more conservative views and opinions." Comment by Mike Bassett: "Where Soros is right, is that these companies are making huge money of other peoples talents. They've created a platform which is brilliant, but it's the content that makes things like youtube popular. They should not be able to take this content like it's theirs."
Social networks erase the limits, they are the means of the boundaryless digital society.
@ Yuri Yegorov,
I agree with your assessment, I think we cannot delink the biological aspect of the most important component of such networks.This is because of your point you've made - the millions of facebook types, in fact, there are indeed thousands of facebook alternatives that pop up every day, what makes participants in social media patronize them? They form preferences and these preferences stick, a product thus becomes successful.
On the path chosen by one and walked upon by billions, rather unfortunately that is what our modern system of business governance is. For example, an MNC can have thousands of employees but the board decides what direction to take.
Facebook and Microsoft were made by billionaires, the hidden investors behind most major companies. Every country has a 1%, and if one organizes society, such pyramids inevitably form... it's just a natural formation of a hierarchy...
To be completely honest, I have always been attracted by monopolies, particular in large economic spaces. In a larger context, it is an amazing development (like how Facebook has managed to do it). In reality, it is nothing more than a brand - and the fact that it has just attracted too many participants to be ignored. Blue Ocean strategy in the truest sense of the word.
The economics of such networks, again, are still primitive. People won't pay to connect, so Facebook becomes a privately owned business with a public service application. Advertisement and business data still form major components of its' revenue... for me, such models are still primitive due to the lack of tangible value (in a very economic sense of the term).
Dear Yuri, as always very edgy and constructive comments from your side.
What I afraid the most, and it is at full throttle at this very moment, is very well summarized in the picture of Zuckerberg in Barcelona - whereby he was happily walking among audience which was having full VR sets all over. See attached.
Ethics is a huge topic - well under-discussed and a burning one, if you ask me. I am not huge optimist that some general consensus will be reached in order to more rigidly regulate this area. At the end of the day, we end up being directed [maybe even brainwashed] by casual guys worth several hundreds of billions of dollars.
But, our job should be to question. So let's do the questioning. :)
Social networks have produced unresolved various problems of which economic ones are not top important. In my opinion crucial are the legal issues. They emerged with the advent of Disruptive Financial Innovations. The word "financial" does not necessarily mean we should limit ourselves to this area. The point is that so far regulators throughout the world have not come to same or even similar conclusions and the mess looks really horrendous while, as Aleksandar mentioned, secret services penetrated and sedimented their delicate interests both in software and hardware used in the Internet industries. It gives scope for them to make all sort of analyses based on disputed legal or illegal access to records and streams of big data which can be used both politically as well as commercially, thus reducing the role of an individual to digital matter under complete control
of behaviour. We are not far from neo-marxist ideology. Anyone trying to alienate himself from the system, whether by his radicalism or by staying back, should be punished or socially killed. An individual here is absurd. One has to merge with the crowd, that's the perfect realisation of matter's
emancipation. I am fundamentally sceptical about AI, though, it may never become reality on the basis of mathematics I know.
Those legal issues pertain mostly to the scope of various types of responsibilities. There have appeared entities like the DAO which do not possess any legal representation in front of the court of law or the tax authority while all smart contracts and their consequences are irrevocable, allowing no arbitrage or any change. We are not far from forming a dystopian society of unimaginable consequences. The DAO (Decentralized Autonomous Organisation) was the first DAO in history, it eventually failed and was closed after having been hacked and millions of dollars stolen.
Today there is a continuous battle with the emergence of cryptocurrencies, the whole issue very much related to social media without which no ICO would have been possible. There is a craze and a bubble. Bitcoin was worth about 3,000 USD in June 2017, today it above 11,600 USD. From the point of view of the Internet network economy, money, wealth, fever, profits, losses, you name it, Cryptocurrencies, tokens and token applications, Initial Coin Offerings are best examples of how fast
this world of digits has been changing our environment and our life. And standard or classical Internet social networks may become obsolete. Looking at the capitalisation of the cryptocurrencies globally, the number gives a shock to eyes. AI? No, it is still going the normal way. Smart, intelligent people, computer geniuses, IT experts stand behind the most unbelievably successful technologies of the Distributed Ledger.
Good points Paul. To say it frankly I do not understand your skepticism around AI. Your cryptocurrency-based standpoint is solid but you can not really bond AI to it/them.
All in all, some break through steps by EU Commission: General Data Protection Regulation [88 pages] -> http://ec.europa.eu/justice/data-protection/reform/files/regulation_oj_en.pdf.
So we can not really say that we do lack of regulations (at least at this point).
AI is a utopian concept. It needs a seperate thread to discuss.
Regulators lag behind the disruptive financial innovations.
Cryptocurrencies are not financial instruments at the moment. Some countries banned ICOs (China, South Korea), banned cryptoexchanges (China), some facilitated cryptoexchanges (Japan), in the U.S.A. three different financial authorities treat cryptos differently. On top of it, even before the emergence of the disruptive financial innovations we have the secrecy jurisdiction problem and tax evasion. Also we need to mention peer-to-peer lending, crowdfunding and smart contracts. China and Russia have been doing research by central banks, Estonia tried to launch its own cryptocurrency in 2017 only to be halted last minute by Draghi (ECB). Social communicators link people who share their ideas and organize themselves in different structures than those communicators. Those changes gained pace last year.
We may argue about AI from the point of view of mathematics but I see no argument from the point of view of philosophy and the element of transcendence. In my view the chance of making AI is similar to the probability of making new life from scratch, quarks up, down, charm, strange, top, bottom..
I see that my question raises serious interest and discussions. Thanks to everybody for answers.
I agree with @Paul that not only economic problems of networks matter. Thank you for paying attention to legal aspects and concern about crypto-currencies. The last is coming due to general development of IT and due to low cost of hour and Gb per computer (necessary for bitcoin).
I also think that psychological dependence on networks might matter more. People become addicted. They have limited time, and they substitute real travel, real meeting with friends by watching their photos and messages. Even the search. On one hand, it seems beneficial that everybody is opened to match freely with billions of people. So you check first thousand, 2nd, etc - in the end you spend less time on real communication, and even emerging partnership is unlikely to become stable because of permanent existence of competitors from internet. I read somewhere that children of millenium (born near 2000) do less sex and get driver's license later than people born 20 years before. But clearly they know more computer games, chats, etc.
The problem: people cannot self-limit. I would be in favor of volume dependent fees for network users (or setting an upper time/volume limit for free use), but I also want to prohibit preference-changing ads and other brainwashing activity on net. This will help for people to self-limit their use of networks, and to avoid its adverse psychological effects.
Here I wanted to tell that markets will not solve emerging problems by "invisible hand" because (due to IRS, see my post above) it does not work. Billions of user are dependent on millions of developers of IT, and those developers has little rational feedback from users (also because networks are like drugs - but we never allowed drug market to develop freely!). They follow narrow orders from few people with billions of $$, and nobody of them (IT) knows where all the system moves. I know that if it stops, their jobs are under threat. But do they think about even more jobs (including intellectual) that can be lost in future to robots and AI? Do they think about other externalities for users and society from uncontrolled development of IT, AI, etc?
Finally, we have more important global problems that need R&D and are different from IT. This is our growing pressure on environment, global warming, coming peak oil, unlimited population growth, geopolitical tension. Moving a higher fraction of our lives into networks reminds me an ostrich putting his head in sand to avoid problems. In our case it is also a problem that it is not our individual rational choice (but common craziness influenced by network activity).
The emergence and widespread usage of Internet has led to the beginning of an era of online activities. Coupled with the advent of portable devices like Laptops, Tablets and Smart phones, the social media marketing has taken different dimensions altogether. The most common way for Social Networks to generate revenue is to allow companies to advertise on the site. Access to enormous user base is a valuable commodity. Through social media, it is easier to make any customers to perform a particular action when compared to other approaches. When a customer says something through feedback or recommendation or posts something about any business entity / its product or services, on a social media platform, the potential customers definitely take note of it. For that reason, advertisers are willing to pay more for a popular website than for a comparable ad on a smaller social networking site. In general, the more popular the Web site, the more money it will be able to generate through advertising.
We are witnessing a war over our souls and consciousness through violent (social) media, propaganda and modern ways of terror, pressure and modern slavery. We arę axiological gnomes versus the giant tech leap. Gradually losing culture, tradition and history, replaced with soudbites and second hand narrative. It is an internationalised hybryd war, institunalised in some countries like Russia, Germany, France...
Dear Yuri,
I would like to refer to your last paragraph. There is undoubtedly remarkable potential online. Nothing new. What is new and you mentioned it is the fact that individuals are running away from their issues - online. For instance, we have Instagram "influencers" with millions of followers promoting their life style for a sake of pure vanity. It is simply crazy.
With strong advancements in IT and connectivity, we somehow turned out to be more closed and naive. Incredible.
Dear @Yuri, I find this resource very appropriate for this research question.
Economic Analyses of Social Networks!
This comprehensive two-volume set brings together important contributions providing fundamental economic analyses of social networks and the central roles they play in many facets of our lives. The first volume consists of classic articles that model network formation and games on networks, as well as those on the identification of peer effects from an econometric viewpoint. The second volume provides empirical analyses of network effects on labor, education, development, crime and industrial organization, as well as some laboratory and field experiments. This set of indispensable papers, with an original introduction by the editors, will prove an essential tool to researchers, scholars and practitioners involved in this field...
https://www.google.rs/imgres?imgurl=http://t1.gstatic.com/images?q%3Dtbn:ANd9GcTahDBUgrd0YLDQ6j8sUBalFAWGiowm7Sr0rDfr8yD4e4UJpHal&imgrefurl=https://books.google.com/books/about/Economic_Analyses_of_Social_Networks.html?id%3D7lCNjgEACAAJ%26source%3Dkp_cover&h=968&w=682&tbnid=BfIi783ZG3rwvM:&tbnh=131&tbnw=92&usg=__bqtnSvFik-a_XcYwbbjEjHUQ-Uk%3D&vet=10ahUKEwjexpzs6InZAhWCJ1AKHawiC8wQ_B0IhgEwCg..i&docid=vuVySZX7kf_JqM&itg=1&sa=X&ved=0ahUKEwjexpzs6InZAhWCJ1AKHawiC8wQ_B0IhgEwCg
Slightly off-topic but still in this domain.
Industrial revolution 4.0 - a great documentary by DW. I strongly recommend to watch it, once you have some idle hours. -> https://www.youtube.com/watch?v=6IOH7b68byk
Maybe we should ask ourselves, how social networks do support industrial revolution 4.0? And does it at all?
Thanks dear @Dusan for your contribution. It is not off-topic at all. Maybe you could visit my thread about the similar issue.
https://www.researchgate.net/post/Can_we_consider_automation_as_the_enemy_of_employment
Democratization of information.
Before social media, you had to pay to get out information about your business. Now, every person and company is its own media brand - and there are significantly less barriers to reaching people.
This has allowed smaller brands to gain a foothold in the market much easier. When we see trends like craft beer, food trucks, and local fashion, that is often the result of harnessing social media platforms to build a following in a cost effective way.
Prior to smartphones and social adoption, it was much more difficult (and expensive) to reach people, especially if your location wasn’t on a main street. One or two small businesses isn’t enough to worry a big brand, but millions of them around the country can make a serious dent in their market share.
I want to thank everybody for participation in discussion. The question seems to be much broader than I saw it initially, and I learned a lot. Just to summarize my ideas as they look after the discussion.
1. Social network is a complex structure, with separate laws governing its development (explained more by the theory of networks). Its economics include interaction between firms (doing advertising) and consumers (that get it as a side product). There are scale economies favoring large networks at the expense of small.
2. Psychological interaction between users and network is very important. It is far from being fully rational (as it is assumed in economic theory). Advertising uses an influence on subconscious to change preferences of consumers.
3. If a network is used smartly, it is beneficial for user. He/she can get new knowledge from the posts of friends, and AI helps sometimes to select information of personal interest. There is also psychological satisfaction from "likes". Network allows to deal with large distances (that separate friends or relatives) at low cost.
4. But there exist some problems related to addiction. They become stronger because the charged fee (if any) is not proportional to volume. Many people cannot limit themselves, and "network time" steals leisure from real communication with friends, travel, etc. This is similar to the market of free drugs or alcohol. There are 3 groups of people: a) not interested in consumption even at zero price, b) with preferences to consume at any price (like highly addicted to drugs), c)with consumption volume dependent on price. The group c) is the main, and normally its size is regulated by price. If price is zero, they tend to increase consumption without bound, with all negative consequences. This is the same for drugs, alcohol and social networks. That it why we need to help those people, either by economic methods or by special education.
One of the basic presumptions that underlie much of the economic modeling of network formation is the view that the individuals involved in networks choose with whom they interact. Individuals are assumed to form or maintain relationships that they find beneficial, and avoid or remove themselves from relationships that are not beneficial. This is sometimes captured through equilibrium notions of network formation, but is also modeled through various dynamics, as well as agent-based models where certain heuristics are specified that govern behavior. This choice perspective traces the structure and the properties of networks back to the costs and benefits that they bestow upon their participants.
Excerpted from: The Study of Social Networks in Economics by Matthew O. Jackson
https://web.stanford.edu/~jacksonm/netsocialecon.pdf
Dear Yuri,
3. Capital IF in this paragraph of yours. I believe that networking of any kind can not make any harm. However, social networks phenomenon in its today's appearance lost this network context it should has. It diverted our attention from the core benefits of networking towards "being a lonely digital shepard" concept. Think about digital and lonely in the same phrase. From many studies I read and personal experiences, up-sloping trend is to utilize social media/networks for the sake of pure vanity.
4.If my opinion would count, I would introduce fees for using social networks. Might not be a long shot solution, but at least audience and content would consolidate a bit. I do not know, just a thought. Although might be a good conceptual paper in the future.
Regards.
Yes, Dusan, smart people do not receive damage from using a network, which they can fully control. Like killing links with "false friends". Being lonely and using network are also two distinct psychological states. But you are right that they became interrelated more frequently.
I recall one movie named "Chatroom", see https://en.wikipedia.org/wiki/Chatroom_(film) . It is about dangerous experience of teenagers. One has almost committed suicide as a result.
Online Social networks are basically funded through advertising incomes. The most obvious and perhaps prevalent role of networks is as a conduit of information, and one of the most extensively documented role for social networks in economics is that of contacts in good and service markets. An extension of the income that includes user fees, is a great challenge for the coming years.
What do you think about the future valuation of people with high knowledge (like encyclopedia on 2 legs) in our more digitized society? Is their knowledge becoming obsolete, when all information is available on internet? Do we still need them because a lot of information on internet is false?
But the role of complementary knowledge (not the facts, but interlinks between them) is probably growing. Networks allow to extract and combine information from different sciences. Do you think that the people who have multidisciplinary vision and an do such synthesis will be valued more in future? (I think that artificial intelligence will be unable to do so before many scientists would be able to do it.)
Maybe somebody is interested to contribute to my other question about relative role of knowledge and will for personal success? See https://www.researchgate.net/post/What_is_more_important_for_success-knowledge_or_will?
Without knowledge one would drawn in the sea of information in the Internet:).
1. What do you think about the future valuation of people with high knowledge (like encyclopedia on 2 legs) in our more digitized society? Is their knowledge becoming obsolete, when all information is available on internet? Do we still need them because a lot of information on internet is false?
The future would depend on the availability and accessibility of this knowledge, it's value on application that leads to solving social problems. It is not enough knowing solutions or problems, how you apply this knowledge is critical to the valuation of the body of knowledge (since it is cumulative). As knowledge accumulates, it seem meaningless now, but over a period of time, value can be attained. Furthermore, it probably depends on the depth of application and relevance to whatever problem or grey area it attempts to explain.
2. Do you think that the people who have multidisciplinary vision and an do such synthesis will be valued more in future? (I think that artificial intelligence will be unable to do so before many scientists would be able to do it.)
I think being multidisciplinary is a good development, however, multidisciplinary practice has limitations as you probably need to cover for expertise in two or more vocational (assuming utilitarian principals here, I am strictly not a utilitarian) avenues. This will then need to be evaluated based on application of certain intersections between such sets of skills. Again, we can't really guarantee value creation just because of having a multidisciplinary 'vision', everyone combines ideas together sometime in their lives, what is valuable is the type of disciplines you combine and the valuation of such a synthesis from the output of which should solve complex societal problems.
In my view, it's not about what you combine, it's more about the whys and what is addressed... and valuation is probably only possible after an output becomes measurable. How can you even postulate an output if there is no historical data - so you need a history of applied practice behind the process of valuation. Synthesis is subjective, output is not.
Just my 2 cent's worth.
Hope this helps.
Dear @Santosh, thank you very much for your detailed answer. I agree that interdisciplinary cooperation is complex, but my statement was like a "proof" that computers will be unable to takeover it from researchers in the coming decades.
By the way, I have a new question about reasons for inefficiency in cooperation: https://www.researchgate.net/post/What_are_the_reasons_of_inefficiency_in_scientific_cooperation
Slightly off-topic but still very actual and possibly revealing upcoming trends?
https://t3n.de/news/zalando-spart-200-mitarbeiter-jobs-individualisierung-981580/?utm_source=t3n-Newsletter&utm_medium=E-Mail&utm_campaign=M%C3%BChsam+n%C3%A4hrt+sich+das+SEO-Eichh%C3%B6rnchen%21
Unfortunately, available in German but hopefully big boy Google can assist
Putting some document into a social network exposes it to public interest, that can be translated into economic reward. However, this interest may depend not only on innovative content (positively) but also on complexity (to some extent negatively).
You may be interested in my other question, related to public valuation of music on such platforms like YouTube; see https://www.researchgate.net/post/What_is_the_optimal_complexity_level_of_a_song_to_become_popular_today
Fine resource!
"The Social Capital Project is a multi-year research effort that will investigate the evolving nature, quality, and importance of our associational life. “Associational life” is our shorthand for the web of social relationships through which we pursue joint endeavors—namely, our families, our communities, our workplaces, and our religious congregations. These institutions are critical to forming our character and capacities, providing us with meaning and purpose, and for addressing the many challenges we face..."
https://www.lee.senate.gov/public/index.cfm/socialcapitalproject?ID=B109CC4F-BA12-43C2-BB70-356F0D1B3A2E
By coincidence, the report was released as Facebook CEO Mark Zuckerberg testified before Congress about the social-media company he says “connects the world.”
https://www.deseretnews.com/article/900015584/why-social-capital-is-more-important-than-social-media.html
Dear Yuri Yegorov,
There are many determinants of the development of social media portals, whose operation can be studied, interpreted and described in economic terms. Thanks to this, these social media portals were growing so fast.
The problems of the analysis of information contained on social media portals for marketing purposes are described in the publication:
https://www.researchgate.net/publication/322241537_THE_QUESTION_OF_THE_SECURITY_OF_FACILITATING_COLLECTING_AND_PROCESSING_INFORMATION_IN_DATA_BASES_OF_SOCIAL_NETWORKING
I invite you to discussion and cooperation. Greetings
Best wishes
One way social networking sites manage to make money is through investments from venture capitalists. These investors are essentially making a bet that the site they're investing in will become popular and will eventually find a way to monetize that success. Getting in early can mean a huge payoff down the road. There are several examples of large corporations buying out Internet startup companies for millions -- or even billions -- of dollars.
How do social networking sites make money?
https://computer.howstuffworks.com/internet/social-networking/information/how-social-networking-sites-make-money.htm
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