From Earth to Solaria and Back The evolution of social interactions in the Internet era

1. From Earth to Solaria and BackThe evolution of social interactions in the Internet era Fabio Sabatini Sapienza University of RomeDepartment of Economics and Law Congresso Iberoamericano de Sistemas de Conhecimento Vale dos Vinhedos - Bento Gonçalves, Brasil October 27, 2011

2. Social Capital Gatewayhttp://www.socialcapitalgateway.org/

3. you can download my papers from: http://www.socialcapitalgateway.org/editor

4. This presentation will be largely devoted to the role of the Internet in the accumulation of social capital. All references can be retrieved (and freely downloaded) at the url: http://www.socialcapitalgateway.org/internet

5. Solaria • Solaria is a fictional planet Isaac Asimov described in the Foundation and Robot series. • It was the last of the fifty worlds to be colonized by the so-called Spacers, a line of space colonists. • After centuries of sustained economic growth boosted by an unboundedtechnical progress, Solaria developed the most eccentric culture of the colonies.

6. Solaria • Originally, there were about 20,000 people living alone in vast estates. • Solarians’ lives were marked by technology: citizens never had to meet, save for sexual contact for reproductive purposes. • All other contact was accomplished by sophisticated holographic viewing systems, with most Solarians exhibiting a strong phobia towards actual contact, or even being in the same room as another human. • All work was done by robots: there were indeed thousands of robots for every Solarian.

7. Solaria • As centuries went by, economic growth and technical progress made Solaria become even more rigidly and obsessively isolationist. The planet cut off all contact with the rest of the Galaxy (although continuing to monitor hyperspatial communications). • Its inhabitants genetically altered themselves to be hermaphroditic in order to avoid sexual contacts. • At the final stage of Solarian civilization, the human inhabitants disappeared, giving the impression that they had died out (although they had in fact withdrawn underground). Their estates continued to be worked by millions of robots.

8. Growth, technology and the risk of “dehumanization” • Asimov draws on the Solaria metaphor to warn against the risks of dehumanization that may be caused by excessive growth and technical progress. • In the 1950s, Asimov’s novel well embodied the common fear according to which technology would have progressively destroyed social interaction.

9. Today, October 27, 2011 • Today, our lives are marked by technology almost as those of Solarians, and – despite the spreading of some criticism - growthis still the policy makers’ pole star. • The widespread diffusion of broadband, the internet revolution, and the true explosion of online networks like Facebook, Twitter, and Flickr create growing worries about the risk of relational poverty. • The folk wisdom pointing to technology as one of the major responsible of the widespread social isolation of our time has get stronger and stronger, walking at the same pace of technological advance.

10. What is happening to social interactions? • According to the earlier sociological literature on the Internet, communication technologies may lower the probability of having face-to-face contacts with family, neighbours, or friends in one’s home. • Wellman et al. (2006) note that internet usage may even interfere with communication in the home, creating a post-familial family where family members spend time interacting with computers, rather than with each other.

11. The supposed decline in social capital • Robert Putnam (1995; 2000) has documented how most indicators of social capital followed an inverted U path in the United States during the twentieth century. • During the first two thirds of the century “Americans took a more and more active role in the social and political life of their communities”, and they behaved in an increasingly trustworthy way toward one another (2000, p. 183). • Then, beginning in the 1960s and 1970s and accelerating in the 1980s and 1990s, an erosion of the stock of American social capital started.

12. The supposed decline in social capital 1) Pressure on time and money2) Mobility and sprawlThese phenomena have been considered in the economic literature as channels through which economic growth can cause a reduction in social connectedness. Putnam discusses 3 main explanations for this inverted-U trend: 3) Technology and mass mediaTechnology has made news and entertainment increasingly individualized. “Electronic technology allows us to consume hand-tailored entertainment in private, even utterly alone … the time allocation of Americans massively shifted toward home-based activities (especially watching TV) and away from socializing outside the home” (2000, pp. 216-217 and 238).

13. The negative social externalities of growth • It is possible to argue that the pressure on time exerted by economic growth acts as a factor hampering the consolidation of social ties, thereby leading to an erosion of the stock of social capital. • Routledge and von Amsberg (JME, 2003) show that the technical change and innovation generally associated to growth influence social capital by rising labour mobility: higher levels of turnover may hamper the consolidation of social ties, both inside and outside the workplace. • Moreover, the uncertainty of future incomes related to increased mobility affects any form of long-term planning of life activities such as marriage and procreation.

14. The negative social externalities of growth • An early account of this process is given by FredHirsch (Social Limits to Growth, 1976): “As the subjective cost of time rises, pressure for specific balancing of personal advantage in social relationships will increase ... Perception of the time spent in social relationships as a cost is itself a product of privatized affluence. • The effect is to whittle down the amount of friendship and social contact ... The huge increase in personal mobility in modern economies adds to the problem by making sociability more of a public and less of a private good”.

15. The negative social externalities of technology • Conventional wisdom suggests that growth’s perverse effects on social cohesion are bound to be exacerbated by technical progress (Solaria syndrome). • In an interview to the New York Times, Robert Putnam stated that “The distinctive effect of technology has been to enable us to get entertainment and information while remaining entirely alone. • It’s fundamentally bad because the lack of social contact means that we don’t share information and values and outlook that we should”.

16. Why should economists care about social capital? • One of the more intriguing theses standing from the debate is that trust and social capital are key factors for making the economy work in the right way. • The economy’s ability of “reproducing” itself, thereby experiencing sustainable growth, depends also on its ability to foster - or, at least, to preserve - its endowments of social capital. • A summary of the mechanism: a) a social environment rich of participation opportunities is a fertile ground for nurturing trust and shared values, where repeated interactions foster the diffusion of information and raise reputation’s relevance. b) The higher opportunity cost of free-riding in prisoners’ dilemma kind of situations makes the agents’ behaviour more foreseeable causing an overall reduction of uncertainty. c) Therefore, an increase in trust-based relations reduce monitoring costs and, more in general, the average cost of transactions, specially the highly trust-sensitive ones (e.g. those ones taking place in the financial market). d) In the long run, such a mechanism may boost growth and development.

17. Why should economists care about social capital? • The reverse effect that growth and development exert on the accumulation of social capital is a surprisingly (and guiltily) neglected topic in the economic debate (…). • It is logical to argue that the mechanism works along two directions: not only social capital feeds growth and development: growth and development create, shape, destroy social capital as well. In other words, themechanism is circular. • This presentation will try to provide some hints on the conditions under which such a social capital-fed development can be sustainable in the long run or, in other terms, when the social capital  trust  development cycle may be able to self-feed.

18. Why should economists care about social capital? • Sustainable development can be defined as a process for improving the range of opportunities that will enable individual human beings and communities to achieve their aspirations and full potential over asustained period of time (i.e. in the long run), while maintaining the resilience of economic, social and environmental systems. • We could adapt this definition of sustainable development to our framework by stating thatdevelopment is sustainable as far as it does not erode the stock of social capital of the economy.

19. Bibliographical references on the relationship between social capital and economic growth are available at the url http://www.socialcapitalgateway.org/growth

20. A model: Antoci, Sabatini and Sodini (2011, JEBO) • We assume that, in each instant of time t, the well-being of the individual depends on the consumption of two goods: a private (or material) good, Ci(t), and a socially provided (or relational) good, Bi(t). • Even if private and relational goods satisfy different needs, the private good can be consumed as a substitute for the relational one. • For example, when the social environment is poor, people may be constrained to replace human interactions, e.g. joining the meetings of a cultural circle or playing football with friends, with private consumption, e.g. staying at home and watching TV or playing a virtual match against the computer.

21. Definition of relational goods • Relational goods are a distinctive type of good that can only be enjoyed if shared with others. They are different from private goods, which are enjoyed alone (Uhlaner 1989). Following Coleman (1988, 1990), we assume that social participation (i.e. the production/consumption of relational goods) generates social capital as a by-product.

22. Model: Private vs. relational goods • We assume that Bi(t) is produced through the joint action of the time devoted to social activities, the average social participation, and the stock of social capital: • The time agent i does not spend for social participation, is used as an input in the production of the private good. Moreover, we model the claims of the empirical literature by assuming that SC plays a role in private production:

23. Model: Private vs. relational goods • The instantaneous utility of the representative agent is represented by the following CES function: i.e. agents’ well-being depends on private and relational goods. • We assume that private goods can satisfy both private and social needs. On the contrary, relational goods cannot satisfy primary needs such as food, security, clothing, and shelter.

24. Model: Private vs. relational goods • As we state in the introduction, these goods serve different needs. However, we introduce the possibility that private goods substitute for relational ones in the satisfaction of social needs, or, at least, for compensating the deprivation of human interactions. For example, a material, highly technology intensive, good like a playstation can (partially) console for the unavailability of 21 friends to play football on a sport field. • The extent to which such a substitution process can take place is given by measuring the (constant) elasticity of substitution between B and C. We will address two cases: • Low substitutability between B and C (θ > 0). In this situation, material and relational goods are complements. • High substitutability between material and relational goods (θ > 0). We will refer to this case by saying that B and C are substitutes.

25. Model: accumulation of social capital • Following hints from rational choice sociology, we assume that most of the times the creation of social ties does not depend on rational investment decisions. Social capital is accumulated as a by-productof social participation. • Following hints from political science, we assume that the production of private goods exerts a positive spillover on social capital’s accumulation. • Since human relations need care to be preserved, we introduce a positive SC’s depreciation rateηto account for their possible cooling over time:

26. Model: accumulation of social capital • The resulting stock is a public resource, which enters as an argument in every agent’s utility function due to its ability to contribute to the production of both private and relational goods.

27. Model: the agent’s problem • Letting r be the discounting rate of future utility, the i-agent’s maximization problem is: • Under the constraint: • Since agents are a continuum, i takes the average values of s, B, and Y as given. • Please refer to the paperif you want to learn more about the exact functional forms.

28. Model: exogenous technological progress • In this framework, we introduce an exogenous technological progress. • We assume that technological progress raises productivity in the production of both private and relational goods. • The assumption is based on the observation that technology can help the production of relational goods in a variety of ways. • where T represents technological progress, growing at the exogenous rate μ.

29. Results • If the following assumptions hold: • There is positive substitutability between B and C • and Ks gives a significant contribution to the production of private goods. • and technological progress contributes to the production of material goods more than to the production of relational goods: • Then the stock of social capital may exhibit a growth followed by a decline, so that its relationship with technological progress is described by an inverted U-shaped curve.

30. Results • If there is no substitutability between B and C • Or if: • Ks contributes to the production of relational goods more than to the production of material goods • and technological progress supports productivity more in the production of relational goods than in the production of material goods: • Then, the stock of social capital can unboundedly grow.

31. Interpretation of results • The role of technology in social interactions. • When can technological progress support the production of relational goods more than the production of material goods? • In our view, this is the case for online networking, i.e. participation to social networking sites such as Facebook and Twitter.

32. Interpretation of results • In the rest of the presentation, we will show: A) how, in a world characterized by a rising pressure on time, the evolution of human interaction implies a partial shift from face-to-face interactions to Internet-mediated interactions. B) Why we do not have to worry about this change.

33. An evolutionary model (Antoci et al. 2011c and 2011d) • We model a society composed by a continuum of identical individuals. In each instant of time they choose how to allocate their leisure time, p, which is exogenously given, between two kinds of social interaction. • We assume that, in each instant of time t: 1) A share x(t) of agents embrace a social networking strategy SN, i.e. their social participation relies both on online networks and face to face interaction. 2) The remaining share of the population 1 – x(t) adopts a face-to-face strategy FF: they do not interact online and thus develop all their relationships through face to face encounters.

34. Payoffs • The payoff of the FF strategydepends on x(t) and on the share of time devoted to social interaction, p. • The payoff of the SN strategy depends on the share of the population adopting it, x(t), on the time agents devote to social participation, p, and on the wealth of ties - or, in other words, the stock of social capital - of online networks at time t, : Kn(t)

35. The Internet social capital as a public good • The stock Kn(t) is a public good, in that it potentially benefits whoever is connected to the Web and adopts the SN strategy. • A peculiarity of Kn(t) is that it allows asynchronous interactions which may help people to reconcile working activities and pervasive busyness with the need to take care of social relationships. When individuals cannot meet in person due to time differences (think, for example, of people working on a night shift, or of friends living in different hemispheres), the Internet social capital offers the possibility of a quality though deferred interaction. • What happens here is NOT the replacement of actual encounters with deferred, more impersonal and less deep, contacts. • Rather, in this case the Internet social capital offers individuals the possibility to preserve relationships which would otherwise be unravelled by busyness, distance, and the pressure of time.

36. Payoffs: further assumptions • We assume that the payoff of the FF strategy decreases as the share of the population adopting the SN strategy grows. • The payoff of the SN strategy increases as Kn, i.e. the stock of the internet’s social capital, grows. In other words, the more our friends join Facebook, the higher the utility of subscribing to the platform will be as well. On the other hand, being outside of the network (i.e. continuing to play the FF strategy) may imply an increasing relational cost.

37. Payoffs: further assumptions (the role of p) • The more the time p available for social participation declines, the more the SN strategy becomes comparatively more profitable. • By contrast, a growth in the time p for leisure makes the FF strategy comparatively more profitable. • If agents are forced to be deeply immersed in their professional activities, the possibility to take care of human relationships in spare moments (e.g., while on the train, or at home before going to sleep) becomes a precious means for the preservation of social life. • SN can thus be interpreted also as a “defensive” strategy that individuals adopt to protect their social life from growing pressure on time.

38. Payoffs: further assumptions (the role of p) • Please refer to the full papers for the development of the theoretical framework: - Antoci, A., Sabatini, F., Sodini, M. (2011b). See You on Facebook! A framework for analyzing the role of computer-mediated interaction in the evolution of social capital. Submitted. - Antoci, A., Sabatini, F., Sodini, M. (2011c). Bowling alone but tweeting together: the evolution of human interaction in the social networking Era. Submitted.

39. Results of the analysis of the model • We show that two “extreme” stationary states are “attractive”: 1) (Kn, x) = (0, 0) all agents adopt the FF strategy 2) (Kn, x) = [(pβ / γ), 1]: the stock of the Internet social capital reaches its highest possible level and all agents embrace the social networking strategy.

40. Results of the analysis of the model • In the two cited papers we show that the basins of attraction of the stationary state where all agents chose the SN strategy (and the stock Kn representing the wealth of knowledge and ties of the Internet reaches its highest level) expands as the time p available for social participation decreases. • Internet-mediated interaction can be seen as a tool allowing individuals to manage their social relationships despite increasing time pressures and possible distance constraints. The yellow line moves towards the left-bottom part of the plane as p decreases

41. Empirical evidence • Early sociological studies on computer-mediated communication shared the fear that the Internet would cause a progressive reduction in social interactions, just as the activity of watching TV does. • The main argument shared by Internet skeptics was based on the presumption that the more time people spend using the Internet during leisure time, the more time has to be detracted from social activities (Katz et al. 2001; Nie et al. 2002, Attewel et al. 2003; Gershuny 2003; Robinson and Martin 2010). • However, studies emphasizing the negative correlation between Internet usage and sociability date back to just shortly before the explosion of online networking, and they could not differentiate between pure entertainment and social activities. • At that time, using the internet was predominantly an individual activity like watching TV or reading newspapers.

42. Pew Research Center on Internet & American Life • Today, the use of the internet is strongly related to being connected to social networking sites, which in turn entails forms of engagement in social activities. • In the U.S. 73% of online teens (aged 12-17) and an equal number (72%) of young adults (18-29) use social network sites. • In the U.S. in May 2011 fully 65% of online adults now use social networking sites. • This figure marks a dramatic increase from the first time the Project surveyed usage of social networking sites in February of 2005. At that time just 8% of internet users or 5% of all adults said they used SNSs. • In December 2010, U.S. Internet users were found to be more likely than others to be active in some kind of voluntary group or organization: 80% of American Internet users participate in groups, compared with 56% of non-Internet users. • Social media users are even more likely to be active: 82% of social network users and 85% of Twitter users are group participants (Rainie et al. 2011). • This evolution makes any comparison between the internet and TV anachronistic!

43. Empirical evidence • Recent empirical evidence suggests that SNSs: a) support the strengthening of bonding and bridging social capital (Steinfield et al. 2008, Park et al. 2009; Pénard and Poussing 2010; Bauernschuster et al. 2011) b) allow the crystallization of weak or latent ties that might otherwise remain ephemeral (Haythornthwaite 2005, Ellison et al. 2007: 2011; Miyata and Kobayashi 2008) c) facilitate the establishment of collaborations in the academic community (Matzat 2004) d) support teenagers' self-esteem - encouraging them to relate to their peers (Ellison et al. 2007; 2011; Steinfield et al. 2008) e) stimulate social learning (Burke et al. 2010) f) enhance social trust (Matzat 2010), civic engagement (Stern and Adams 2010; Zhang et al. 2010) and political participation (Gil de Zúñiga et al. 2011)  SEE THE “ARAB SPRING”! g) help the promotion of collective action (Landqvist and Teigland 2010).

44. Ellison et al. (2007) • Drawing on survey data from a random sample of 800 undergraduate students, Ellison et al. (2007) find that certain types of Facebook use can help individuals accumulate and maintain bridging social capital. • The authors suspect that the social network helps students to overcome the barriers to participation so that individuals who might otherwise shy away from initiating communication with others are encouraged to do so through the Facebook infrastructure. • In the authors' words, highly engaged users are using Facebook to “crystallize” relationships that might otherwise remain ephemeral (2007). • Haythornthwaite (2005) argues that social media create latent tie connectivity among group members that provides the technical means for activating weak ties (p. 125). Latent ties are those social network ties that are technically possible but not activated socially (p. 137)

45. The quality of Internet-mediated communication • Web-mediated asynchronous interactions are not necessarily of inferior quality compared to simultaneous, face-to-face, interactions. • Experiments found that the depth of a friendship can be significantly improved by computer-mediated communication. Apparently, by way of online relationships individuals become far better in expressing their true selves and feelings (Ellison et al. 2007; Park et al. 2009b; Burke et al. 2010; Sheldon 2010; Burke and Settles 2011). • Interactions through the Internet can foster the social inclusion of individuals suffering from social anxiety, i.e. anxiety about social situations, interactions with others, and being evaluated by others (Caplan 2007; Steinfield et al. 2008). • Thanks to new tools such as Facebook messages and Flickr mails, many people have regained the habit of writing letters. Psychological studies claim this form of interaction can lead to an improvement in the quality of relationships.

46. Bauernschuster et al. (2011) • In a recent paper based on data drawn from the 2008 section of the German Socio-Economic Panel and confidential data provided by Deutsche Telekom, Bauernschuster et al. (2011) find that having broadband Internet access at home has positive effects on the frequency of visiting theaters, the opera, and exhibitions and on the frequency of visiting friends, even after controlling for endogeneity through instrumental variables estimates and by accounting for county fixed effects. • Exploring a sub-sample of children aged 7 to 16 living in the sampled households, the authors further find evidence that having broadband Internet access at home increases the number of children's out-of-school social activities, such as doing sports or ballet, taking music or painting lessons, or joining a youth club.

47. Internet, relational goods, and happiness • Since engagement in relational activities and social capital are positively correlated with happiness (Becchetti et al. 2008; Bruni and Stanca 2008; Gui 2010; Stanca 2010; Bartolini et al. 2011), Internet usage could also have a positive effect on individual well-being (see Pénard and Poussing 2011 and Sabatini 2011). • It thus seems reasonable to argue that Internet use can support well-being by counterbalancing some detrimental effects of the increasing pressure on time. From the policy point of view, this implies that the REDUCTION IN THE DIGITAL DIVIDE could be an effective measure to contain inequalities in the distribution of well-being.

48. Summary • Economic growth and technological progress can cause the disruption of social ties and the erosion of social capital  SOLARIA SYNDROME. • The Solaria Syndrome can be avoided if and only if technological progress contributes to the production of relational goods at least as much as it contributes to the production of material goods.

49. Summary • This condition would have been irrealistic at the beginning of the current decade. • Today, the explosion of online networking has brought a major change in the role of technology in the development of our social life. • When the social environment is poor in opportunities for participation and/or the pressure on time increases (for example due to the need to increase working hours, the social capital stored in the Internet can help individuals to defend their sociability.

50. Summary • In our view, the Internet is offering us a way back from Solaria to Earth. • The reduction in digital divide should be a major policy objective for the preservation of social cohesion (making growth more “socially sustainable” in the long run) and the reduction of inequalities in the distribution of well-being. (Besides the obvious benefits for the economic activity)