Network flatness

27Dec15

This is the last post in a short series examining the benefits and drawbacks of thinking about the world in terms of ‘networks’ .  Earlier on, I gave an introduction to mathematical network theory, I discussed the network as a way of explaining the world and I discussed  social media as model for social networks. In this post I focus on the ‘flat’ and ‘democratic’ image that networks carry .

Why is it that people tend to regard networks as nonhierarchical? Mathematical network theory is perfectly suited to describe hierarchies as networks and even if hierarchy is not a defining property of the network, in most social networks a handful of people have much more influence or power than most. One reason networks are seen as flat may be the other big idea that is inspired, in part, by the Internet: self-organization.

The idea of self-organization predates the Internet, but it gained much traction lately. There turn out to be phenomena in the world that have an amazing complexity considering they emerged without a master plan or a leader giving orders. Bird flocks, termite hills and (most likely) the human brain are well known examples.  If these can come out of networks of animals each just exhibiting their own behavioral patterns, or just from networks of cells, why not self-organize as human beings? Look at how well democracy works.  Look at Wikipedia. All we have to do is to create (better) networks and order and common good will magically emerge.

The Achilles’ heel of this reasoning is of course that the examples of self-organization which are used as a source of inspiration are, in fact, sophisticated systems which evolved over many years. Yes, fairly simple, properly networked, behaviors can create complex phenomena benefiting the species creating them. But this only works if these are carefully tuned networks of simple behavior.  Self-organization may be occurring in all networks, but the result will more often than not be uncertain rather than favorable for all. Take traffic jams, these are form of self-organization too.

What do we know about the effects of increasing connectivity in a network? Two opposing dynamics appear to be at play. First, in networks with a high connectivity, the Internet as perfect example, there is a strong winner-takes-all dynamic. Before Internet we would find a bookstore on every corner, but in the online world only a handful of players like Amazon can survive.  In the less connected word every bookshop could preserve its own clientele in the neighborhood, because the switching costs to a bookshop farther away did not outweigh the benefits for most consumers. Increasing connectivity lowers the switching costs, increasing the action radius of the shops and the competition too. As a result bigger shops survive. So Google dominates search, Amazon dominates online retail. Similar things happen with increased connectivity in the real world. Better roads lead amenities too disappear in villages, because of increased connectivity to the city. The winner-takes-all dynamic thus leads to a centralization in networks, rather than a decentralization, like many proponent of self-organisation like to believe.

There is, however, an opposing dynamic, which Chris Anderson described in his book The Long Tail. The winner-takes-all dynamic creates a high head (few players take all the traffic), but Anderson pointed our attention to what is happening at the other end of the curve. Lets look at those who sell rare goods in small quantities.  Increased connectivity allows shops that would not sell enough in the less connected world because they serve such a niche market to gain the audience they need to be sustainable. Artists may be able to make a living out of selling their artwork thanks to the Internet because they can reach out to a bigger potential audience. Grocery shops may disappear in villages, but an expensive restaurant, for which people are willing to travel to the village may now survive.

The winner-takes-all and the long-tail dynamic are this two sides of the same, increased connectivity, coin. In my post thinking internet and thinking I included the following quote from Brian Eno.

 “I notice that everything the Net displaces, reapears somewhere else in a modified form. For example, musicians used to tour to promote their records, but since records stopped making much money due to illegal downloads, they now make records to promote their tours. Bookstores with staff who know about books, and record stores with staff who know about music, are becoming more common.”(Brian Eno)

This comment may very much be an illustration of the interplay between the two connectivity dynamics. Increased network connectivity leads to centralization and increased power when we look at who controls the commodities. Well connected networks are typically more hierarchical than less connected networks. But increased connectivity leads to decentralization and diversification when we look at the niches instead.

Interestingly, the biggest players on the net Amazon, Google, and Wikipedia have found ways to make use of both dynamics.  They managed to become the first stop for internet users, partly by aggregating much of what happens in the niches. It is fine to take those players as a source of inspiration, of the potential benefits of networks. But they do not show networks are flat or democratic (quite the contrary) and they are not examples of the wonders of self-organization. For that we better stick to termites.

Reading more.

An nice book about self-organisation is turtles termites and traffics jams by Mitchel Resnick. An advocate of human self-organisation is  James Surowiecki who’s book The Wisdom of the Crowds turned into a best seller.

This post is part of a series. The first post deals with mathematical network theory, the second with networks as an explanation of everything and the third with social media as a proxy for understanding social networks.

The Brian Eno quote in this blog was taken from my post “Thinking Internet and Thinking”, which deals with great minds anwers to the question how internet affects our thinking. I discussed several applications of network theory to marketing in my posts “Modeling the connected customer” and “The Traveling Influence Problem”.

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