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Please use this identifier to cite or link to this item:
http://hdl.handle.net/2451/28313
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| Title: | The Gestalt in Graphs: Prediction Using Economic Networks |
| Authors: | Dhar, Vasant
Oestreicher-Singer, Gal
Sundararajan, Arun
Umyarov, Akhmed |
| Keywords: | network effects
economic networks
copurchase networks
predictive models
data mining |
| Issue Date: | 15-Oct-2009 |
| Series/Report no.: | CeDER-09-06 |
| Abstract: | We define an economic network as a linked set of entities, where links
are created by actual realizations of shared economic outcomes between
entities. Such networks are becoming increasingly prevalent on the
Internet, an example being the copurchase netwok on Amazon where
entities are books and links designate which pairs were purchased
simultaneously. Our dataset covers a diverse set of books spanning over
400 categories over a period of three years with a total of over 70
million observations. To our knowledge, this is the first large scale
study showing that an economic network contains useful predictive
information that is distributed in the network. We show that an economic
network contains predictive information. Specifically, we demonstrate
that an entity’s future demand is more accurately predicted by
combining its historical demand with that of its neighbors than by
considering its demand alone. In other words, if you want to know what
your state will be in the future, consider what is happening to your
neighbors now. This result could apply to other economic networks where
outcomes of sets of entities tend to be related. |
| URI: | http://hdl.handle.net/2451/28313 |
| Appears in Collections: | CeDER Working Papers
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