IDEAS home Printed from https://ideas.repec.org/a/gam/jmathe/v12y2024i8p1141-d1373365.html
   My bibliography  Save this article

Dynamics of Social Influence and Knowledge in Networks: Sociophysics Models and Applications in Social Trading, Behavioral Finance and Business

Author

Listed:
  • Dimitris Tsintsaris

    (School of Economics, Aristotle University of Thessaloniki, 54124 Thessaloniki, Greece)

  • Milan Tsompanoglou

    (School of Economics, Aristotle University of Thessaloniki, 54124 Thessaloniki, Greece)

  • Evangelos Ioannidis

    (School of Economics, Aristotle University of Thessaloniki, 54124 Thessaloniki, Greece)

Abstract

In this paper we offer a comprehensive review of Sociophysics, focusing on relevant models as well as selected applications in social trading, behavioral finance and business. We discuss three key aspects of social diffusion dynamics, namely Opinion Dynamics (OD), Group Decision-Making (GDM) and Knowledge Dynamics (KD). In the OD case, we highlight special classes of social agents, such as informed agents, contrarians and extremists. As regards GDM, we present state-of-the-art models on various kinds of decision-making processes. In the KD case, we discuss processes of knowledge diffusion and creation via the presence of self-innovating agents. The primary question we wish to address is: to what extent does Sociophysics correspond to social reality? For that purpose, for each social diffusion model category, we present notable Sociophysics applications for real-world socioeconomic phenomena and, additionally, we provide a much-needed critique of the existing Sociophysics literature, so as to raise awareness of certain issues that currently undermine the effective application of Sociophysics, mainly in terms of modelling assumptions and mathematical formulation, on the investigation of key social processes.

Suggested Citation

  • Dimitris Tsintsaris & Milan Tsompanoglou & Evangelos Ioannidis, 2024. "Dynamics of Social Influence and Knowledge in Networks: Sociophysics Models and Applications in Social Trading, Behavioral Finance and Business," Mathematics, MDPI, vol. 12(8), pages 1-27, April.
    • Handle: RePEc:gam:jmathe:v:12:y:2024:i:8:p:1141-:d:1373365
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2227-7390/12/8/1141/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2227-7390/12/8/1141/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Jan Lorenz, 2007. "Continuous Opinion Dynamics Under Bounded Confidence: A Survey," International Journal of Modern Physics C (IJMPC), World Scientific Publishing Co. Pte. Ltd., vol. 18(12), pages 1819-1838.
    2. Ioannidis, Evangelos & Varsakelis, Nikos & Antoniou, Ioannis, 2018. "Communication Policies in Knowledge Networks," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 492(C), pages 360-374.
    3. Ioannidis, Evangelos & Varsakelis, Nikos & Antoniou, Ioannis, 2019. "Change agents and internal communications in organizational networks," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 528(C).
    4. Vilela, André L.M. & Wang, Chao & Nelson, Kenric P. & Stanley, H. Eugene, 2019. "Majority-vote model for financial markets," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 515(C), pages 762-770.
    5. Crass, Dirk & Valero, Francisco Garcia & Pitton, Francesco & Rammer, Christian, 2019. "Protecting Innovation Through Patents and Trade Secrets: Evidence for Firms with a Single Innovation," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 26(1), pages 117-156.
    6. Galam, Serge, 2000. "Real space renormalization group and totalitarian paradox of majority rule voting," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 285(1), pages 66-76.
    7. Katarzyna Sznajd-Weron & Józef Sznajd, 2000. "Opinion Evolution In Closed Community," International Journal of Modern Physics C (IJMPC), World Scientific Publishing Co. Pte. Ltd., vol. 11(06), pages 1157-1165.
    8. Lin, Min & Li, Nan, 2010. "Scale-free network provides an optimal pattern for knowledge transfer," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 389(3), pages 473-480.
    9. Panchenko, Valentyn & Gerasymchuk, Sergiy & Pavlov, Oleg V., 2013. "Asset price dynamics with heterogeneous beliefs and local network interactions," Journal of Economic Dynamics and Control, Elsevier, vol. 37(12), pages 2623-2642.
    10. Yang, J.-H. Steffi, 2009. "Social network influence and market instability," Journal of Mathematical Economics, Elsevier, vol. 45(3-4), pages 257-276, March.
    11. Cohen, Joel E. & Hajnal, John & Newman, Charles M., 1986. "Approaching consensus can be delicate when positions harden," Stochastic Processes and their Applications, Elsevier, vol. 22(2), pages 315-322, July.
    12. Cowan, Robin & Jonard, Nicolas, 2004. "Network structure and the diffusion of knowledge," Journal of Economic Dynamics and Control, Elsevier, vol. 28(8), pages 1557-1575, June.
    13. Ioannidis, Evangelos & Varsakelis, Nikos & Antoniou, Ioannis, 2018. "Experts in Knowledge Networks: Central Positioning and Intelligent Selections," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 509(C), pages 890-905.
    14. Giacomo Vaccario & Mario V. Tomasello & Claudio J. Tessone & Frank Schweitzer, 2018. "Quantifying knowledge exchange in R&D networks: a data-driven model," Journal of Evolutionary Economics, Springer, vol. 28(3), pages 461-493, August.
    15. Robert Axelrod & Will Mitchell & Robert E. Thomas & D. Scott Bennett & Erhard Bruderer, 1995. "Coalition Formation in Standard-Setting Alliances," Management Science, INFORMS, vol. 41(9), pages 1493-1508, September.
    16. Fan, Kangqi & Pedrycz, Witold, 2015. "Emergence and spread of extremist opinions," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 436(C), pages 87-97.
    17. Galam, Serge, 2004. "Contrarian deterministic effects on opinion dynamics: “the hung elections scenario”," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 333(C), pages 453-460.
    18. Cowan, R. & Jonard, N., 2003. "The dynamics of collective invention," Journal of Economic Behavior & Organization, Elsevier, vol. 52(4), pages 513-532, December.
    19. Yang, Guang-Yong & Hu, Zhao-Long & Liu, Jian-Guo, 2015. "Knowledge diffusion in the collaboration hypernetwork," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 419(C), pages 429-436.
    20. Guillaume Deffuant, 2006. "Comparing Extremism Propagation Patterns in Continuous Opinion Models," Journal of Artificial Societies and Social Simulation, Journal of Artificial Societies and Social Simulation, vol. 9(3), pages 1-8.
    21. Dietrich Stauffer, 2002. "The Sznajd Model Of Consensus Building With Limited Persuasion," International Journal of Modern Physics C (IJMPC), World Scientific Publishing Co. Pte. Ltd., vol. 13(03), pages 315-317.
    22. Ioannidis, Evangelos & Varsakelis, Nikos & Antoniou, Ioannis, 2017. "False Beliefs in Unreliable Knowledge Networks," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 470(C), pages 275-295.
    23. Brock, William A. & Hommes, Cars H., 1998. "Heterogeneous beliefs and routes to chaos in a simple asset pricing model," Journal of Economic Dynamics and Control, Elsevier, vol. 22(8-9), pages 1235-1274, August.
    24. Shive, Sophie, 2010. "An Epidemic Model of Investor Behavior," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 45(1), pages 169-198, February.
    25. Frank Schweitzer & Antonios Garas & Mario V. Tomasello & Giacomo Vaccario & Luca Verginer, 2022. "The Role Of Network Embeddedness On The Selection Of Collaboration Partners: An Agent-Based Model With Empirical Validation," Advances in Complex Systems (ACS), World Scientific Publishing Co. Pte. Ltd., vol. 25(02n03), pages 1-18, March.
    26. Katarzyna Sznajd-Weron, 2005. "Sznajd model and its applications," HSC Research Reports HSC/05/04, Hugo Steinhaus Center, Wroclaw University of Science and Technology.
    27. AskariSichani, Omid & Jalili, Mahdi, 2015. "Influence maximization of informed agents in social networks," Applied Mathematics and Computation, Elsevier, vol. 254(C), pages 229-239.
    28. Cook, Wade D., 2006. "Distance-based and ad hoc consensus models in ordinal preference ranking," European Journal of Operational Research, Elsevier, vol. 172(2), pages 369-385, July.
    29. Andreas Flache & Rainer Hegselmann, 1998. "Understanding Complex Social Dynamics: a Plea for Cellular Automata Based Modelling," Journal of Artificial Societies and Social Simulation, Journal of Artificial Societies and Social Simulation, vol. 1(3), pages 1-1.
    30. Kelly, J.A. & St. Lawrence, J.S. & Diaz, Y.E. & Stevenson, L.Y. & Hauth, A.C. & Brasfield, T.L. & Kalichman, S.C. & Smith, J.E. & Andrew, M.E., 1991. "HIV risk behavior reduction following intervention with key opinion leaders of population: An experimental analysis," American Journal of Public Health, American Public Health Association, vol. 81(2), pages 168-171.
    31. Claire McInerney, 2002. "Knowledge management and the dynamic nature of knowledge," Journal of the American Society for Information Science and Technology, Association for Information Science & Technology, vol. 53(12), pages 1009-1018, October.
    32. Shiller, 021Robert J. & Pound, John, 1989. "Survey evidence on diffusion of interest and information among investors," Journal of Economic Behavior & Organization, Elsevier, vol. 12(1), pages 47-66, August.
    33. Mohammad Afshar & Masoud Asadpour, 2010. "Opinion Formation by Informed Agents," Journal of Artificial Societies and Social Simulation, Journal of Artificial Societies and Social Simulation, vol. 13(4), pages 1-5.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Fan, Kangqi & Pedrycz, Witold, 2016. "Opinion evolution influenced by informed agents," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 462(C), pages 431-441.
    2. Evangelos Ioannidis & Nikos Varsakelis & Ioannis Antoniou, 2021. "Intelligent Agents in Co-Evolving Knowledge Networks," Mathematics, MDPI, vol. 9(1), pages 1-17, January.
    3. Ioannidis, Evangelos & Varsakelis, Nikos & Antoniou, Ioannis, 2018. "Experts in Knowledge Networks: Central Positioning and Intelligent Selections," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 509(C), pages 890-905.
    4. Evangelos Ioannidis & Nikos Varsakelis & Ioannis Antoniou, 2020. "Promoters versus Adversaries of Change: Agent-Based Modeling of Organizational Conflict in Co-Evolving Networks," Mathematics, MDPI, vol. 8(12), pages 1-25, December.
    5. Song, Xiao & Zhang, Shaoyun & Qian, Lidong, 2013. "Opinion dynamics in networked command and control organizations," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 392(20), pages 5206-5217.
    6. Fan, Kangqi & Pedrycz, Witold, 2015. "Emergence and spread of extremist opinions," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 436(C), pages 87-97.
    7. Fan, Kangqi & Pedrycz, Witold, 2017. "Evolution of public opinions in closed societies influenced by broadcast media," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 472(C), pages 53-66.
    8. Liming Zhao & Haihong Zhang & Wenqing Wu, 2019. "Cooperative knowledge creation in an uncertain network environment based on a dynamic knowledge supernetwork," Scientometrics, Springer;Akadémiai Kiadó, vol. 119(2), pages 657-685, May.
    9. AskariSichani, Omid & Jalili, Mahdi, 2015. "Influence maximization of informed agents in social networks," Applied Mathematics and Computation, Elsevier, vol. 254(C), pages 229-239.
    10. Quanbo Zha & Gang Kou & Hengjie Zhang & Haiming Liang & Xia Chen & Cong-Cong Li & Yucheng Dong, 2020. "Opinion dynamics in finance and business: a literature review and research opportunities," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 6(1), pages 1-22, December.
    11. Jia-Ping Huang & Yang Zhang & Juanxi Wang, 2023. "Dynamic effects of social influence on asset prices," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 18(3), pages 671-699, July.
    12. Ding, Fei & Liu, Yun & Shen, Bo & Si, Xia-Meng, 2010. "An evolutionary game theory model of binary opinion formation," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 389(8), pages 1745-1752.
    13. Song, Xiao & Shi, Wen & Tan, Gary & Ma, Yaofei, 2015. "Multi-level tolerance opinion dynamics in military command and control networks," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 437(C), pages 322-332.
    14. Agnieszka Kowalska-Styczeń & Krzysztof Malarz, 2020. "Noise induced unanimity and disorder in opinion formation," PLOS ONE, Public Library of Science, vol. 15(7), pages 1-22, July.
    15. Ioannidis, Evangelos & Varsakelis, Nikos & Antoniou, Ioannis, 2017. "False Beliefs in Unreliable Knowledge Networks," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 470(C), pages 275-295.
    16. Francisco J. León-Medina & Jordi Tena-Sánchez & Francisco J. Miguel, 2020. "Fakers becoming believers: how opinion dynamics are shaped by preference falsification, impression management and coherence heuristics," Quality & Quantity: International Journal of Methodology, Springer, vol. 54(2), pages 385-412, April.
    17. Simões, Tiago S.A.N. & Coniglio, Antonio & Herrmann, Hans J. & de Arcangelis, Lucilla, 2024. "Modeling public opinion control by a charismatic leader," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 648(C).
    18. Wang, Jiang-Pan & Guo, Qiang & Yang, Guang-Yong & Liu, Jian-Guo, 2015. "Improved knowledge diffusion model based on the collaboration hypernetwork," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 428(C), pages 250-256.
    19. Jalili, Mahdi, 2013. "Social power and opinion formation in complex networks," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 392(4), pages 959-966.
    20. Valentyn Panchenko & Sergiy Gerasymchuk & Oleg V. Pavlov, 2007. "Asset price dynamics with small world interactions under hetereogeneous beliefs," Working Papers 149, Department of Applied Mathematics, Università Ca' Foscari Venezia.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jmathe:v:12:y:2024:i:8:p:1141-:d:1373365. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.