On the predictability and efficiency of cultural markets with social influence and position biases
AuthorAbeliuk Kimelman, Andrés
AffiliationComputing and Information Systems
Document TypePhD thesis
Access StatusOpen Access
© 2016 Dr Andrés Abeliuk Kimelman
Every day people make a staggering number of decisions about what to buy, what to read and where to eat. The interplay between individual choices and collective opinion is responsible for much of the observed complexity of social behaviors. The impact of social influence on the behavior of individuals may distort the quality perceived by the customers, making quality and popularity out of sync. Understanding how people respond to this information will enable us to predict social behavior and even steer it towards desired goals. In this thesis, we take that step forward by studying how and to what extent one can optimize cultural markets to reduce the unpredictability and improve the efficiency of the market. Our results contrast with earlier work which focused on showing the unpredictability and inequalities created by social influence. We show, experimentally and theoretically, that social influence can help detect correctly high-quality products and that much of its induced unpredictability can be controlled. We study a dynamic process in which choices are affected by social influence and by the position in which products are displayed. This model is used to explore the evolution of cultural markets under different policies on how items are displayed. We show that in the presence of social signals, by leveraging the position effects, one can increase the expected profit and reduce the unpredictability in cultural markets. In particular, we propose two policies for displaying products and prove that the limiting distribution of market shares converges to a monopoly for the product of highest quality, making the market both optimal and predictable asymptotically. Finally, we put to experimental test our theoretical results and show a policy that mitigates the disparities between popularity and quality that emerge from social and position biases. We report results on a randomized social experiment that we conducted online. The experiment consisted of a web interface displaying science news articles that participants can read and later recommend. We evaluated different policies for presenting items to people and measure their impact on the unpredictability of the market. Our results provide a unique insight into the impact of policy decisions for displaying the products in the dynamics of cultural markets.
Keywordssocial influence; cultural markets; Mathew effect; unpredictability; assortment optimization; discrete choice model; position bias
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