Berlin 2005 – scientific programme

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AKSOE: Physik sozio-ökonomischer Systeme

AKSOE 10: Social, Information and Production Networks I

AKSOE 10.3: Talk

Tuesday, March 8, 2005, 11:00–11:30, TU P-N203

Network analysis of markets — •Jörg Reichardt and Stefan Bornholdt — Institute for Theoretical Physics, University of Bremen

Many systems in economy and society may be viewed as networks which often show a surprising modularity. An analysis of this modular structure is often of considerable interest for empirical market research.

Considering a market data set, we apply a recently developed algorithm [1] to the de novo detection of product or consumer communities. To do so, we map the problem of network community detection onto finding the minima in the Hamiltonian of a Potts spin glass. Communities are found to coincide with the domains of equal spin value in these minima. Comparing global and local minima of the Hamiltonian allows for the detection of hierarchies and overlapping (No-dqfuzzyNo-dq) communities and quantifying the association of nodes with multiple communities as well as the robustness of a community. The resulting product communities are compared with standard classifications and the consumer communities clustering allows for targeted marketing.

[1] J. Reichardt, S. Bornholdt, Phys. Rev. Lett. 93, 218701, (2004)