Infonomics
U. Matzat
Sociology/HTI
School of Innovation Sciences
TU/e
email: umatzat@gmail.com
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What is so special with…
- online discussions
- online data bases
- online projects in virtual teams?
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I. New utilitarian individualism:
Individual and collective goods
individual good: a good that a single individual of a group can
acquire and that the individual can consume/use on his own, after
usek/consumption the good can no longer be consumed/used by
other members.
• Definition: a individual good is a good with two characteristics:
a) Exclusiveness of property rights b) rivaly of consumption
collective good: a good that –if it has been acquired by a single
member or more members of a group- is available to all other group
members as well without any additonal effort or costs
•Definition: a collective (or public) good is a good with two
characteristics:
a) No exclusive use possible b) no rivalry of use
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I. New utilitarian individualism:
Individual and collective goods
voorbeelden
individual goods: an apple apple, bread, shoes, cars,
money,…..
collective goods: clean environment, peace, group
rewards, demonstration, group assignment, a (nonprivatized) highway, air polution (collective bad)
•There is an unlimited number of collective and individual
goods
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I. New utilitarian individualism:
Individual and collective goods
...and on the internet?
...in online communities that use social media?
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Individual and collective goods :
individual versus collective rationality
•Production of collective goods in large groups:
•individual rationality does not lead to the best outcome
for the group (individual rationality vs. collective
rationality)
•individual rational behavior has the unintended
consequence that everybody is worse off
•why? – because individuals decide on their ownindependently of the decisions of others
•But the outcome of every decision is dependent on the
decisions of the other group members
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individual versus collective rationality
in social media
•Production of collective goods in large groups: imagine the
development of a common data base for a large virtual community
•Every item of the database can be uploaded by a member
•Costs: time and efforts beared by the contributor
•Benefits: everybody profits independent of his/her own
contribution
•What would a rational member do? What is the result at the level
of the community?
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individual versus collective rationality:
interdependency as a characteristic of the
production of collective goods
inter-dependency
• for an individual the eventual result (net benefit) for
himself are dependent on the behavior of others
• this holds for every individual
• such situations can be analyzed by formalized thought
experiments
• ... in which these decision situations are analyzed:
game theory
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New utilitarian individualism
The Prisoners’ dilemma
The story
• USA: two men have committed a murder
• they are arrested, but there is not enough evidence –
the police needs a confession
• both men can be convicted for possession of illegal
weapons
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The Prisoners’ dilemma
The story
The police puts both individuals in separate interrogation
rooms:
a) when both confess, they both get 10 years in prison for
man slaughter
b) when both do not confess, they each get 2 years in prison
for possession of illegal weapons
c) When one of the two confesses and the other denies, then
the one who confesses gets a deal and is free to go,
whereas the denying person gets 20 years for murder
• How should rational suspects behave?
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The Prisoners’dilemma: formal situation
Outcomes
Preference order
B
Dont confess
Dont
Confess
B
confess
Dont confess
confess
-2 / -2
-20 / 0
2/2
4/1
0 / -20
-10/-10
1/4
3/3
A
Confess
• the individually rational behavior is to confess, for both A and B
(! Think about why that is!)
• ... And that is weird, because then A and B end up in (-10,-10),
whereas there was another possibility in the game ( (-2,-2) ) that is
better for both! Apparently, the game structure prevents A and B
from cooperating.
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Prisoners’ dilemma –
game-theoretical predictions
• although the players are rational, they do end up in an outcome that
can be improved upon for both
• could this change if they could talk to each other before entering into
separate room? Probably not – their promises are not credible
• in this case, confessing is a dominant strategy: A is better of
confessing irrespective of what the other player does
• possible solution: get a third party involved to arrive at (R,R),
although that probably is not very feasible in this example
general formalisation
Cooperation
Coöperation
R/R
B
Defection
S/T
A
Defection
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with
T>R>P>S en
T/S
P/P
R>(T+S)/2
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Prisoners’ dilemma: applications
• the Cold War after 1950 and the arms race between the
US and the USSRde koude oorlog naar 1950 tussen
• cooperation on a joint assignment in class
•advertising
• on eBay in a sequential form...
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Prisoners’ dilemma with n-persons:
Production of collective goods
• the same kinds of examples can be thought of, where the
issue is not between 2, but n players
• there is a joint interest in getting the collective good done
• contributing is costly
• and individual non-contribution might very well be rational
(! Think about when this happens, and when not)
• once more: individuals vs collective rationality. What is good
for the group need not coincide with what is good for the
individual, even though all individuals have the same goals
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Prisoners’ dilemma with n-persons:
Production of collective goods
examples
•Clear environment
•Collaboration in a virtual team of company employees for
a commmon project
•Collaboratory projects of a number of companies
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The problem of free-riding
•The problem of the production of collective goods is easier to
solve in small groups than in large groups
•Implication: large groups have more problems to materialize
their common interests than small groups
•Why? Beause in large groups:
- anonimity: defection (free riding) less noticeable
- distribution of negative effects of free riding on a large
number of individuals
- organisation and coordination of collective action more
difficult than in a small group
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II. Theory development
The fundamental questions of sociology

Social sciences as cycles of problem-theory-research

New problems in web science or innovation science often old
wine in new bottles
Theory formulation in the social sciences
(the ‘T’ in P-T-R)

Until here: “spontaneous” verbal reasoning

Coleman boat

Elaboration of Coleman boat and other rules: how do I find a
solution to a problem?
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Getting in touch with model- and theory buidling in sociology
(or the social scineces in general): “how can I develop a
reasonable argument about a social science topic without
falling into the typical vague blablabla... of sociologists”
More precisely: introduction to rules of verbal theory
formulation
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What is (good) theory?
We us the terms ‘theory’ and ‘model’ interchangeable. It’s
about a set of coherent assumptions, statements, and the
conclusions that can be drawn.

Good theory
 … is focussing on a process (shows how something works
out in general, not only for specific cases)
 … leads to interesting implications (‘interesting’ means at
least: testable through observation/data, preferably also
‘non-trivial’)
 … is as general as possible
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How do you develop a (good) theory?

From specific to general to specific [Lave&March]

Try to understand the observation as the result of an
underlying process (the ‘model’)

Draw conclusions out of the process and test them

If necessary, adapt the model
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Examples of theory
development in the social
sciences
Example 1
“matching”
(semantic model)
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Theory development: matching (1)
The case:
On street you see an ugly guy with a beautiful girl-friend in
his arms.
(First: is this really true? What underlying assumptions do
we make?)
Assumptions:
- my observation is correct
- beautiful and ugly are well-defined
- …?
In search of: theory on how men and women find each other
(“matching”).
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Theory development : matching (1)
Theory 1
Partner choice is random. Therefore every now and then you
meet an ugly guy with a beautiful lady.
Implication: the distribution pretty-pretty, ugly-ugly, ugly-pretty
should be more or less even.
nice example of sociological argument: behavior is much more
influenced by contraints than by preferences (here: who meets
whom where?)
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Theory development : matching (2)
Theory 2
Men and women take into account other issues when choosing a
partner. Women prefer a man who is honest and trustworthy, and
in pinciple a stable father for the common children. Therefore it
may happen that you meet an ugly guy with a beautiful lady. This
buy then has other qualities (honesty, status, income) that
compensate his unfavorable appearance.
Implication:
Ugly men with beautiful women on average are somewhat
richer than nice-looking men with beautiful women.
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Back to the red line…
the principles of social science
according to Coleman
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Macro questions and micro solutions
Social conditions
Social phenomena
bridge gap
between
macro and
micro=
opportunities
and
constraints of
actors?
Which actors?
Which goals/preferences?
How to
transform the
individual
uitcomes to
collective
outcomes?
Behavioral theory
the Coleman boat
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Leads to what
individual behavior?
Macro questions and micro solutions
Difference economics / sociology:



Choice of topics (economics often about money)
Economics often “economic actor” as core of explanation
Sociology emphasizes the unintended consequences of rationally
acting individuals
Difference psychology / sociology:

psychology has “analytic primacy” on the individual level, wants
to understand precisely how individuals make their decisions
about behavior. Sociology is interested in individual behavior only
to the extent that this leads to interesting predictions at the
macro-level.
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Examples of theory
development in the social
sciences
Example 2
“anomie”
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Example : anomie (Durkheim)



Anomie: a situation without governing norms or norms that
lead to a mismatch between individual aspirations (goals)
and available means/resources
“anomic suicide”
More general social phenomen of interest to us: it happens
that althoug social conditions improve, the level of
frustration rises nevertheless

Suicide rates are (sometimes) higher when conditions
improve
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Boudon’s reconstruction – a starting point
To explain:
positive relation between social conditions and level of
frustration (the better the conditions, the higher the level of
frustration)
Explanation (Durkheim’s theory of anomie):
if circumstances improve, human expectations rise. If the
expectations do rise much more than cicrumstances improve,
you will get frustrated even though conditions improve.
in the following: formalisation of the argument
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Boudon’s reconstruction : good social chances


We examine a lottery, investment is 1, gross prize is 3, and the
number of winners is 4. There are 10 potential participants.
Assumption: individuals decide about participation (yes/no) on
basis of the calculation of the expected value.
Pay-off matrix:
0
1
2
3
4
5
6
7
8
9
participate
2.0 2.0 2.0 2.0 1.4 1.0 0.7 0.5 0.3 0.2
Not participate 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0


Assumption: if expected value of participation is strictly higher than
the value of non-participation then individuals participate
Assumption: person gets frustrated if participated but lost
investment. Level of frustration = percentage frustrated after
lottery pay-off = 60%.
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Boudon’s reconstruction : bad social chances


We examine a lottery, investment is 1, gross prize is 2 (instead of 3),
and the number of winners is 4. There are 10 potential participants
Assumption: individuals decide about participation (yes/no) on basis
of the calculation of the expected value.
Pay-off matrix:
0
participate
not participate


1
2
3
4
5
6
7
8
9
1.0 1.0 1.0 1.0 0.6 0.3 0.1 0.0 -0.1 -0.2
0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Assumption: the solution of the game has to be stable, for a given
solution there mustn’t be any player having a reason to deviate on
his/her own
 not everybody participates
Assumption: person gets frustrated if participated but lost
investment. Level of frustration = percentage frustrated after lottery
pay-off < 60%.
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Boudon’s reconstruction: assumptions /
problems







2 choice alternatives: participate yes/no
Utility: only money
Simultaneous decisions
No binding agreements
Complete information
Homogeneity of the population
Condition of individual and collective frustration
Implications for research (PTR)


Relation between gross prize and
[1] participants and
[2] # frustrated
How do the conclusions about the effect of the social
conditions on the level of frustration depend on the
assumptions?
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The Coleman boat in this application
Social conditions:
Social phenomenon:
investment, prize
Level of frustration
bridge gap
between
macro and
micro=
opportunities
and
constraints
of actors?
See last
slides
Which actors?
Behavioral theory:
expected value,
Which goals/preferences?
assumptions about
Homogenous
stable solutions
population of
individuals with a
preference for more
Coleman boat
money.
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How to transform
the individual
uitcomes to
collective
outcomes?
Definition of
‘Level of
frustration’
Leads to what individual
behavior?
Participation: yes or
no?
Boudon: conclusion
Thus: under these conditions it can happen that social
conditions improve; the results is nevertheless increasing
frustration (and vice versa)
What did we get by doing this in a more formal way?
The model makes explicit what the underlying assumptions
of the theory are. We can examine which assumptions are
crucial, and which not.
New questions can be answered: is it always true that
frustration increase if we enhance the social conditions?
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Broader applications of Boudon’s model
Although the model is about a very abstract lottery, we can
apply the argument on various emprical problems.
For instance:






Revolutions
suicide
Privatisation of state companies (beter service provision
leads to more clients and then to more frustration)
Increase of the number of study places in study progams
with a limitation (numerus fixus)
Increasing opportunities of ICT
…
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To do’s

For the next OGO meeting and assignment 2:
Coleman (1987) in the reader and Matzat
(2009)
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