Networks and Transaction Costs

Based on the well-known fact that social networks can provide effective mechanisms that help to increase the trust level between two trade partners, we apply a simple game-theoretical framework to derive transaction costs as a high risk of opportunistic behavior in a repeated trade relation determined by the density and size of trading networks. In the empirical part of the paper we apply a two stage procedure to estimate the impact of social network structures on farm’s transaction costs observed for different input and output markets. At a first stage we estimate a multiple input-multiple output stochastic Ray production function to generate relative shadow prices of three inputs and two outputs traded by farms. At a second stage a structural equation system is derived from the first order conditions of farm’s profit maximization to estimate simultaneously the of commodity specific transaction cost functions for all traded farm inputs and outputs. Estimation results based on a sample of 315 Polish farms imply a significant influence of social network structures on farm’s transaction costs. Moreover, estimated transaction costs correspond to a reasonable amount of farm specific shadow prices.Resource /Energy Economics and Policy,

Computational intelligent methods for trusting in social networks

104 p.This Thesis covers three research lines of Social Networks. The first proposed reseach line is related with Trust. Different ways of feature extraction are proposed for Trust Prediction comparing results with classic methods. The problem of bad balanced datasets is covered in this work. The second proposed reseach line is related with Recommendation Systems. Two experiments are proposed in this work. The first experiment is about recipe generation with a bread machine. The second experiment is about product generation based on rating given by users. The third research line is related with Influence Maximization. In this work a new heuristic method is proposed to give the minimal set of nodes that maximizes the influence of the network

Competition Between Homophily and Information Entropy Maximization in Social Networks

In social networks, it is conventionally thought that two individuals with more overlapped friends tend to establish a new friendship, which could be stated as homophily breeding new connections. While the recent hypothesis of maximum information entropy is presented as the possible origin of effective navigation in small-world networks. We find there exists a competition between information entropy maximization and homophily in local structure through both theoretical and experimental analysis. This competition means that a newly built relationship between two individuals with more common friends would lead to less information entropy gain for them. We conjecture that in the evolution of the social network, both of the two assumptions coexist. The rule of maximum information entropy produces weak ties in the network, while the law of homophily makes the network highly clustered locally and the individuals would obtain strong and trust ties. Our findings shed light on the social network modeling from a new perspective