The Social Dynamics of Economic Activity in a Virtual World

This paper examines social structures underlying eco- nomic activity in Second Life (SL), a massively multi- player virtual world that allows users to create and trade virtual objects and commodities. We find that users con- duct many of their transactions both within their social networks and within groups. Using frequency of chat as a proxy of tie strength, we observe that free items are more likely to be exchanged as the strength of the tie increases. Social ties particularly play a significant role in paid transactions for sellers with a moderately sized customer base. We further find that sellers en- joying repeat business are likely to be selling to niche markets, because their customers tend to be contained in a smaller number of groups. But while social struc- ture and interaction can help explain a seller’s revenues and repeat business, they provide little information in the forecasting a seller’s future performance. Our quan- titative analysis is complemented by a novel method of visualizing the transaction activity of a seller, including revenue, customer base growth, and repeat business.
Date: May 23, 2010
Book Title: Proceedings of the Fourth International Conference on Weblogs and Social Media (ICWSM)
Type: InProceedings
Downloads: 496

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@InProceedings{The_Social_Dynamics_of_Economic_Activity,
  author = "Eytan Bakshy and Matthew P. Simmons and David Huffaker and Chun-Yuen Teng and Lada Adamic",
  title = "{The Social Dynamics of Economic Activity in a Virtual World}",
  month = "May",
  year = "2010",
  booktitle = "Proceedings of the Fourth International Conference on Weblogs and Social Media (ICWSM)",
}