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29 June 2007

Social-network sites give businesses ideas for new collaboration

Interesting article in today's Boston Globe on the development of Web 2.0 style tools to be used within organizations. The first two paragraphs:

If vendors have their way, a second wave of collaborative technologies -- including wikis, blogs, videos, and mashups, platforms and features borrowed from social-networking sites like MySpace -- soon will wash onto computers in the workplace.

Such interactive technologies are part of a larger trend known as Web 2.0 that has taken root in the consumer space. They have the potential to transform commerce, simplifying communications between employees, suppliers, and customers, speakers told business and information technology professionals at the Enterprise 2.0 conference at Boston's Westin Waterfront hotel last week.

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It's an interesting question how transformational these kinds of tools could be within an organization. Organizations, obviously, have other mechanisms for information sharing and community building, and thus there may not be the same type of vacuum that one sees in other settings. Further, many of the barriers to information sharing many be institutional and not technical (actually, I am doing some research on this with fellow bloggers Ines Mergel and Maria Binz Scharf). But I do suspect that there will be some cases where these tools could align pretty well with an organization; the trick will be to identify the appropriate settings.

Posted by David Lazer at 4:01 PM | Comments (2)

18 June 2007

Psychological Traits from Social Network Characterstics

Peter Gloor and Daniel Oster, some of my collaborators from MIT and the University of Cologne, respectively, recently showed that they were able to predict neuroticism and extroversion on a standard psychological test (NEO-FFI) using data from our Sociometric badges in an experiment at a German bank's marketing division (see this earlier post for a description).

They examined the disparities in the infra-red (IR) hits between individuals, using this to determine how "balanced" their communication was. One badge can receive an unreciprocated IR hit from another badge because IR requires a direct line of sight to transmit data. Therefore, if one individual is not directly facing another person, they may recieve IR transmissions. Their conversation partner, however, will not receive anything.

The authors then processed this sensor information into a higher level "contribution index". The contribution index was previously defined by Gloor for e-mail data in online standards communities, and it is essentially: (number of messages sent – number of messages received)/(number of messages sent + received). Here it is defined as numbers of infrared readings picked up by an actor. The higher the value, the more signals an actor picks up. A contribution index of 1 means that an actor looks at other people and is never looked at, while a contribution index of –1 describes an actor who is only looked at while never looking another actor squarely into the face.

The authors found a correlation of -0.74 with neuroticism and a 0.52 correlation with extroversion, which intuitively makes a lot of sense. This work shows the promise of using precise sensor data to map not only social relations on a large scale, but using it to quantify individual personality types as well.

This work is currently under review for submission.

Posted by Ben Waber at 5:16 PM | Comments (0)

17 June 2007

The dark side of social networks - Insights into a WoW goldfarmer's life

Online gaming is a multi-million dollar business. World of Warcraft, one of the most successful role playing games (RPGs) which is said to generating revenues over $250 million. Yet, this business allows third parties to make money too. Given an average age of over 25, many players in the US or Europe don't find the time or just don't want to spend numerous hours in the virtual worlds to develop their characters. The solution comes from countries like China. There, virtual gold is mined or characters are "trained" and then sold via online auctions to those in need. Today's NYT offers an in depth-look at the life of the virtual gold farmers.

Posted by Alexander Schellong at 11:25 PM | Comments (0)

16 June 2007

Bits, Bullets, and the Modern State

Interesting op eds in today’s and yesterday’s New York Times, which together highlight that the defining characteristic of the state, the monopoly on the legitimate application of force (bullets), carries little weight in the absence of information as to how to apply that force (bits).

Yesterday’s op ed, "The Laptop is Mightier than the Sword," by Owen and Bing West, discussed the lack of use of information technology by US forces in the Iraq war. Some excerpts:

The war in Iraq would be over in a week if the insurgents wore uniforms. Instead, they hide in plain sight, and Iraqi and American soldiers have no means of checking the true identity and history of anyone they stop.

This is inexcusable. In Vietnam, the mobility of the Vietcong guerrilla forces was eventually crippled by a laborious hamlet-level census completed by hand in 1968. Biometric tracking and databases have since made extraordinary advances, yet our vaunted technical experts have failed at this elementary task in Iraq.

In short, we have been unable to track individuals in Iraq, and this is fundamentally handicapping efforts to control the population.

In the op ed today, there is a piece by the police commissioner of New York City, Raymond Kelly, Washington’s Secret Gun Files, examining the lack of use of information technology in US law enforcement. An excerpt:

When a gun is recovered from a crime scene, the police ask the federal Bureau of Alcohol, Tobacco, Firearms and Explosives to trace the weapon’s provenance. Yet when our officers request the trace data for all gun crimes, the Tiahrt amendment [which Kelly opposes re-authorization of] stops us dead in our tracks — even though this aggregate information would tell us which individuals and dealers are most often involved in buying and selling guns that end up in the hands of criminals.

These two examples highlight the importance of the control and manipulation of information for the state. In fact, much of the impetus for the development of biometrics originally came from the desire of the modern state in the late 19th century to track the identities of individuals in an increasingly mobile society (see Simon Cole’s excellent book on the emergence of biometrics for further details).

The defining governance challenges of the 21st century will almost certainly revolve around bits and not bullets. The state figured out how to deliver overwhelming force vis a vis its citizens long ago; but where and how to apply that force is far more difficult. Within the state, a key part of the information architecture has to do with what in citizens see and report to authorities (see article in yesterday’s Boston Globe on a new text messaging system to get anonymous tips about crime). These mechanisms of social control by themselves have important limits in a mobile society, hence the increasing importance of information technology. Obviously, in a setting such as Iraq, both the social and technical infrastructures for control by the state are severely limited.

These informational challenges multiply in a world where problems often cross jurisdictional boundaries but information does not. One sees this even within the information architectures of the most modern of states (e.g., the US); however, within the global scene problems will hide where the informational architecture is nonexistent.

……………………

I will also take this posting to make a quick pitch for a forthcoming edited volume that Viktor Mayer-Schoenberger and I have coming out this Summer that explores this and related issues, Information Technology and Governance: From Electronic Government to Information Government (MIT Press: 2007).

Posted by David Lazer at 11:36 AM | Comments (0)

15 June 2007

aSmallWorld.net (asw.com): Teaching Case Released

Yesterday, our teaching case on aSmallWorld.net was released. It is publicly available on the PNG working paper series site.

The case addresses several issues from the social network and online social networking literature. The case's objective is to help students understand how existing offline social ties and interpersonal relationships can be transformed into a powerful online social network/online community which is attractive from several perspectives, such as social networking, online advertising, and entrepreneurial activity.

Alexander Schellong and Thomas Langenberg have jointly developed the case in close collaboration with the Program on Networked Governance as well as the support of Erik Wachtmeister, the CEO of aSmallWorld.net, and Louise Wachtmeister, Marketing Director and Co-Founder of aSmallWorld.

Posted by Thomas Langenberg at 6:32 AM | Comments (0)

13 June 2007

Social Finance - P2P lending - Could Web20 provide the people with the power of banking?

In line with David's recent post on social networks and investing, I stick to the topic and would like to point your attention to Social Finance...

VoIP companies such as Skype, now owned by Ebay, are having a big impact on the telecommunication business. Youtube and blogs are threatening traditional business models in media and communications. The business of head hunting is most likely altered by online social networks. Yet, the tools and structures to do money lending or investing have remained the domain of professional organizations such as banks. Could Social Banking or P2P lending change this?

Social Banking or people-to-people (P2P) lending is a term that is describing web based ventures that provide people an alternative opportunity to lend/borrow money. The banking is called social because it uses social mechanisms used in social software. The purpose of social banking can be for profit or non-for-profit.

How does it work?
Prosper.com was the first people-to-people lending market place (starting in mid 2006). Others followed such as the UK based Zopa, the German based Smava, CircleLending or the soon to be launched Microplace (bought by eBay). Lending club recently announced its collaboration with facebook where its application can be integrated by the 25 Mio+ facebook users. P2P lending allows people either to lend money or borrow money. People who want to borrow money name the amount and their maximum interest rate they are willing to pay. In addition they need a social security number, drivers liecense, a bank account so that prosper can verfiy the identity and other credit information. Borrowers also present their reason for lending the money (i.e. pay for K-School tuition, extend a business), their personal income and expenses and a picture. This information is available to anyone - even non registered members. Former lenders or others such as family members may endorse a borrower. Combined all these measure aim at creating an environment of trust, community and control. Borrowers may also found groups to improve their average credit rating which creates a level of pressure for all group members to avoid late payments which will have an effect on everyone else. Yet, only $25,000 can be borrowed at one time per group or individual borrower.

Lenders can bid on those loans although Prosper is essentially providing the loans and sells it to the lenders. In order to diversify risk, lenders can decide to lend small amounts of money to several borrowers with different credit rating.

Some thoughts
The boundary of interest rate elasticities is obviously determined by the market (central banks and major credit actors). Therefore, lenders are less likely to consider investing money once a borrower's interest rate is below the one lenders would receive in a risk-free money market account. On the other hand borrower's are most likely on willing to pay an interest rate that is the same or below the one provided by major market players.

I am just wondering whether this concept is transferable into any culture and nationstate. According to a survey 74% of British citizens would consider using social banking websites. In contrast, anyone I talked about the idea in Germany was very critical about it, especially the trust component. Trust, cultural norms, social circles and government regulations likely play an important role. Social Banking will certainly be an era where economists and experts of social networks and social capital can enrich each others discussion. This is an emerging trend and as I heard a hot topic for online business investors. Its too early to judge whether social banking can be a disruptive to the banking industry. However, that might be an interesting alternative to many people who are afraid of investing in stocks. Speaking of stocks, may be the next platforms allow individual users or groups of users to do their own IPOs - from P2P lending to P2P stocks!?

What do you think about social banking?
Where do you see its advantages and disadvantages?
Would you participate in it?
Can it disrupt the banking industry?

On a sidenote. There is a US based non-profit (Kiva.org) which is trying to do more or less the same thing for microcredits to the poor in developing countries. And the website netbanker is a good way to keep up with trends in the eBanking industry.

Posted by Alexander Schellong at 12:00 AM | Comments (2) | TrackBack

12 June 2007

I am creating my own online social network: Team TriOdy and Social Science Research in Practice

Yesterday, I made use of the ning.com social networking platform and created my first online social network: Team TriOdy (link:http://triody.ning.com). I am part of a group of active endurance sports enthusiasts that is regularly sharing information about races, trainings, and other related tips&tricks. I therefore thought it might be cool to turn this offline community into an online one. According to my own research results regarding information sharing in online communities, I follow two main strategies:

1. Get a critical mass of people involved in this project that are not necessarily "sitting in the same office or area" (so that there is a reason for them to visit the site). I plan to invite all my sports friends as well as the friends of these friends.
2. Also, I want to be as dedicated as possible and create as much interesting content as possible (in so doing I hope to make sure that people come and visit my site). From my latest research I know that community members with high "emotional commitment" and "high participation in information" exchange are most crucial to the success/sustainability of a user community.

I'll keep you updated on my progress!

Posted by Thomas Langenberg at 8:46 AM | Comments (6)

9 June 2007

The small world of investing

Interesting NBER paper discussed in today’s NYT, by Laren Cohen, Andrea Frazzini, and Christopher Malloy. The gist of it: that investments by mutual funds are more likely in companies in which the manager of a fund has classmates on the board of directors, and, further, the returns on those investments are far higher than investments in which the manager does not have “old school ties.” Further, the timing of these investments is tied to particular news events from the corporation, suggestion some “information transfer” is occurring.

This is both a neat bit of research, which makes a persuasive case for the presence of information transfer. The magnitude of the effect is particularly striking when you consider that their proxies for a social network, while reasonable, are certainly noisy. That is, while attending the same school, especially in the same cohort, is certainly strongly predictive of a relationship, people do not have relationships with all of their classmates, and have many/most of their relationships with non-classmates. So this effect (almost double the return for investments associated with ties as compared to those not) is likely a fairly conservative estimate of the impact of social ties.

I would also note that this paper is also illustrative of entry of social network ideas into economics (generally by a new cohort of scholars), as well as (to revisit my earlier discussions about computational social science) the potential to mine the growing mountains of relational data that now exist in various archives.

Posted by David Lazer at 9:43 AM | Comments (1)

6 June 2007

Friends of my friends are my… enemies?

It will be interesting to observe the impact of Fred Thompson’s incipient entry into the race for the Republican nomination. One part of the story will be the competition for voters. Another will be the competition for dollars. Per earlier entries on the election, a key to mobilizing resources for a run at the Presidency is the network of big money donors. Interestingly, the competition should be particularly brutal among candidates who are in a similar position (“structurally equivalent”) in the fundraising network. If candidates A and B both are friends with C, then A and B are in competition for C’s dollars. The empirical question, in Thompson’s case, is who is he most structurally equivalent to. My naïve guess is that among the big three, McCain would be, with both drawing on a conservative Washington financial base. Giuliani and Romney likely both have fairly structurally distinct financial foundations. In any case, we should be able to tell more by looking at the second quarter financial reports. It also would be interesting to examine who has contributed to more than one candidate, and which candidates tend to draw from the same part of the network.

Posted by David Lazer at 8:10 PM | Comments (0)