A Friend Like Me: Modeling Network Formation in a Location-Based Social Network

Journal of Management Information Systems, 33(4), 1008-1033

Posted: 25 Apr 2016 Last revised: 8 Jul 2017

See all articles by Gene Moo Lee

Gene Moo Lee

University of British Columbia (UBC) - Sauder School of Business

Liangfei Qiu

University of Florida - Warrington College of Business Administration

Andrew B. Whinston

University of Texas at Austin - Department of Information, Risk and Operations Management

Date Written: April 24, 2016

Abstract

This paper studies the strategic network formation in a location-based social network. We build an empirical model of social link creation that incorporates individual characteristics and pairwise user similarities. Specifically, we define four user proximity measures from biography, geography, mobility, and short messages. To construct proximity from unstructured text information, we build topic models using Latent Dirichlet Allocation. Using Gowalla data with 385,306 users, 3 million locations, and 35 million check-in records, we empirically estimate the model to find evidence on the homophily effect on network formation. To cope with possible endogeneity issues, we use exogenous weather shocks as our instrumental variables and find the empirical results are robust: network formation decisions are significantly affected by our proximity measures. Our network formation model and the proposed user proximity measures have theoretical and managerial implications on the friend recommendation and the implementation of firms’ seeding strategies in location-based social networks.

Keywords: network formation, location-based service, social networks, user proximity, topic modeling, homophily

Suggested Citation

Lee, Gene Moo and Qiu, Liangfei and Whinston, Andrew B., A Friend Like Me: Modeling Network Formation in a Location-Based Social Network (April 24, 2016). Journal of Management Information Systems, 33(4), 1008-1033, Available at SSRN: https://ssrn.com/abstract=2769696 or http://dx.doi.org/10.2139/ssrn.2769696

Gene Moo Lee (Contact Author)

University of British Columbia (UBC) - Sauder School of Business ( email )

2053 Main Mall
Vancouver, BC V6T 1Z2
Canada

Liangfei Qiu

University of Florida - Warrington College of Business Administration ( email )

Gainesville, FL 32611
United States

HOME PAGE: http://sites.google.com/site/qiuliangfei/

Andrew B. Whinston

University of Texas at Austin - Department of Information, Risk and Operations Management ( email )

CBA 5.202
Austin, TX 78712
United States
512-471-8879 (Phone)

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