How important are you?

It’s not how many contacts you have but your place within a network of contacts that defines how important you are, says Professor Matthew Jackson, Eberle Professor of Economics at Stanford University who is visiting the University of Auckland.

It’s not how many contacts you have but your place within a network of contacts that defines how important you are, says Professor Matthew Jackson, Eberle Professor of Economics at Stanford University who is visiting the University of Auckland.

Dr Jackson is the world’s leading researcher in network economics, a multi-disciplinary and relatively new field of research which seeks to understand economic and social behaviour through understanding that all interactions between people are networked.

“Whether you hear what jobs have become available, or whatever political opinions you hold or what products you buy or movie you go see, all of these things are heavily influenced by the people in your network,” he says.

“Understanding what our networked relationships look like and how they influence our behaviour is fundamental to understanding whether or not we make the right decisions and to understanding economic behaviour more broadly.”

Dr Jackson says interest in social network analysis has increased enormously in recent years with modelling approaches and techniques to investigate how networks influence outcomes in finance, international trade, development economics and labour economics.

In international trade, Professor Jackson has co-authored research on how trade links may help prevent countries going to war. The research examined multilateral trade relationships and showed trade motives were essential to avoiding wars.

Dr Jackson’s free public lecture will focus on his latest research showing gossip has a powerful influence on economic outcomes.

Research conducted within 43 villages in India showed that a statistical model of the most effective way to diffuse information in a network closely matched the answers villagers gave when asked the best way to spread information in the village.

The research found that quality – not quantity – was what mattered.

“Those identified as gossips were not always community leaders. The really influential person is not necessarily the person with the most connections, or who is most central in the network, it’s somebody who is well connected in the sense that they are well connected to people who are well connected.”

After gathering data on social networks within 43 villages in India, the study came up with a statistical model of the most effective way information could be diffused within a network. When the researchers compared the answers in the model to answers the villagers gave when asked who was the best person to talk to in order to spread information in the village, the villagers’ answers were remarkably close to the results mapped by the model.

“This means we can go into a community, ask a few people who the best people are to help spread information and their answers will be as accurate as a statistical model that uses more formal data-gathering techniques,” Dr Jackson says.

“Understanding communication patterns is vital to understanding what new programmes or products might succeed in improving life in the developing world. So this research provides a relatively easy way to understand how information spreads which could make the difference between innovative ideas floundering or succeeding.”

Dr Jackson is the visiting Seelye Fellow at the University of Auckland. He is Eberle Professor of Economics at Stanford University, an external faculty member of the Santa Fe Institute and a Senior Fellow of the Canadian Institute for Advanced Research. His research interests include game theory, microeconomic theory, and the study of social and economic networks, including diffusion, learning, and network formation.

He was an early adopter of MOOCs (Massive Open Online Courses) and a pioneer in “flipped” classes, where students watch a video online before attending a lecture, allowing more in-depth discussion and analysis during class time. He also uses the Moblab teaching tool where students play a range of games that mimic auctions and markets in real life.

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