Human Preference Formation and Measurement of Impact in Large Techno-Social Systems

Palacios-Huerta, Ignacio

Publication year:

2023

Publication place:

Donostia

Characteristics:

BIBLID [0212-7016; eISSN: 2952-4180 (2023), 68, 2] - Recep: 2023-09-23; Accep.: 2023-11-03

ISSN:

0212-7016; eISSN: 2952-4180

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Summary

Large techno-social systems refer to complex systems that integrate technology and social structures to deliver services, products and solutions to large populations. Examples include the Internet, social media networks, online marketplaces and e-government systems. This paper addresses two fundamental aspects arising in these systems. First, since human preferences are both an input and an output, these systems may have a significant impact on behavior, for example, by shifting consumer preferences, changing attitudes, reinforcing existing biases, creating new biases or by altering social norms and expectations. This means that to understand this impact it is necessary to have an equilibrium framework for thinking about the endogenous formation of preferences. Second, much research argues that these systems may disrupt traditional business models, create new markets, increase competition, and alter labor markets. As such, they will have an impact on the equilibrium forces in the global economy. But, how strong are these forces and in what direction they operate? These are challenging questions whose answers, intuitively, depend on who are the most important or influential agents. This in turn begs the question: How can we measure the “impact” of different agents in an interdependent, interconnected world? This paper reviews formal frameworks available in the literature that are useful to study both the endogenous formation of preferences and the measurement of impact in these systems.

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