Communication Network Formation

  Illustrative visualization of a communication network forming under game-theoretic specifications (Source: FCN)

This self-funded FCN research consists of both game-theoretical and empirical contributions to diverse disciplines dealing with communication network formation. Latest projects explicitly illustrate the relevance of this topic for energy consumers. We are targeting at top-quality academic journals. Overall, this research is aiming towards a habilitation thesis exploring the role of communication network formation in social and economic contexts related to energy issues and its implications for future research.

Theoretical contributions

• Communication network formation with link specificity and value transferability
  (FCN Working Paper No. 15/2010)
  We propose a model on strategic formation of communication networks with the negative externality of link specificity: the more direct links somebody maintains, the less she can specify her attention per link, the lower her links’ value, as well as the positive externality of value transferability via indirect links for informational but not for social value from communication. We provide both analytical and simulation results about resulting pairwise stable as well as efficient networks.
• Communication network formation with valuation heterogeneity
  We extend the previous model by valuation heterogeneity in the sense that individuals have different values for their fellows or have different opinions on the values of their fellows, e.g., there exists an expert in the community. We provide both analytical and simulation results about resulting pairwise stable as well as efficient networks.
• Competitive technology diffusion by endogenously and strategically formed networks
  The diffusion of new technologies among consumers is an important phenomenon in energy economics, where people can switch regarding technologies as well as interaction partners. Therefore, we are developing a game-theoretic model of competitive technology diffusion where consumers endogenously and strategically form social interaction networks. We examine how we can add to the growing economics as well as physics literature on coordination with endogenous network formation and assist providers of new energy technologies with understanding of their diffusion process.

Empirical contributions

• Behavioral effects in individual decisions of network formation
  (FCN Working Paper No. 5/2010)
  Complexity reduces payoff orientation and social preferences. This article provides an experimental investigation of behavioral effects in individual decisions of network formation. Our findings demonstrate that specific complexity features of the network setting make individuals’ choices systematically less payoff-guided and also strongly less socially motivated.
• Dynamic social network visualization from online discussion about energy saving
  Much about energy saving by consumers can be learned from what they tell each other about it in online discussion fora. Therefore, we are performing a longitudinal case study of the Austrian discussion platform www.energiesparhaus.at. Specifically, we visualize the dynamics of the communication network among consumers with respect to a popular subtopic. By adding to the recent literature on dynamic social network visualization we intend to gain new insights into the dynamic characteristics of online consumer communication fora as well as into the topic of consumer energy saving and how this can be facilitated by these low-cost online communication platforms.

References

Galeotti A., Goyal S., Kamphorst J. (2006). Network Formation with Heterogeneous Players. Games and Economic Behavior, 54(2): 353-372.

Harmsen-van Hout M.J.W., Dellaert B.G.C., Herings P.J.-J. (2010a). Behavioral Effects in Individual Decisions of Network Formation: Complexity Reduces Payoff Orientation and Social Preferences, FCN Working Paper No. 5/2010, Institute for Future Energy Consumer Needs and Behavior, RWTH Aachen University, May.

Harmsen-van Hout M.J.W., Herings P.J.-J., Dellaert B.G.C. (2010b). Communication Network Formation with Link Specificity and Value Transferability, FCN Working Paper No. 15/2010, Institute for Future Energy Consumer Needs and Behavior, RWTH Aachen University, November.

Jackson M.O. Watts A. (2002). On the Formation of Interaction Networks in Social Coordination Games. Games and Economic Behavior, 41(2): 265-291.

Trier M. (2008). Towards Dynamic Visualization for Understanding Evolution of Digital Communication Networks. Information Systems Research, 19(3): 335-350.