Social Network Analysis for the Effective Adoption of Recommender Systems

Abstract

Recommender system is the system which, by using automated information filtering technology, recommends products or services to the customers who are likely to be interested in. Those systems are widely used in many different Web retailers such as Amazon.com, Netfix.com, and CDNow.com. Various recommender systems have been developed. Among them, Collaborative Filtering (CF) has been known as the most successful and commonly used approach. CF identifies customers whose tastes are similar to those of a given customer, and recommends items those customers have liked in the past. Numerous CF algorithms have been developed to increase the performance of recommender systems. However, the relative performances of CF algorithms are known to be domain and data dependent. It is very time-consuming and expensive to implement and launce a CF recommender system, and also the system unsuited for the given domain provides customers with poor quality recommendations that make them easily annoyed. Therefore, predicting in advance whether the performance of CF recommender system is acceptable or not is practically important and needed. In this study, we propose a decision making guideline which helps decide whether CF is adoptable for a given application with certain transaction data characteristics. Several previous studies reported that sparsity, gray sheep, cold-start, coverage, and serendipity could affect the performance of CF, but the theoretical and empirical justification of such factors is lacking. Recently there are many studies paying attention to Social Network Analysis (SNA) as a method to analyze social relationships among people. SNA is a method to measure and visualize the linkage structure and status focusing on interaction among objects within communication group. CF analyzes the similarity among previous ratings or purchases of each customer, finds the relationships among the customers who have similarities, and then uses the relationships for recommendations. Thus CF can be modeled as a social network in which customers are nodes and purchase relationships between customers are links. Under the assumption that SNA could facilitate an exploration of the topological properties of the network structure that are implicit in transaction data for CF recommendations, we focus on density, clustering coefficient, and centralization which are ones of the most commonly used measures to capture topological properties of the social network structure. While network density, expressed as a proportion of the maximum possible number of links, captures the density of the whole network, the clustering coefficient captures the degree to which the overall network contains localized pockets of dense connectivity. Centralization reflects the extent to which connections are concentrated in a small number of nodes rather than distributed equally among all nodes. We explore how these SNA measures affect the performance of CF performance and how they interact to each other. Our experiments used sales transaction data from H department store, one of the well?known department stores in Korea. Total 396 data set were sampled to construct various types of social networks. The dependant variable measuring process consists of three steps; analysis of customer similarities, construction of a social network, and analysis of social network patterns. We used UCINET 6.0 for SNA. The experiments conducted the 3-way ANOVA which employs three SNA measures as dependant variables, and the recommendation accuracy measured by F1-measure as an independent variable. The experiments report that 1) each of three SNA measures affects the recommendation accuracy, 2) the density's effect to the performance overrides those of clustering coefficient and centralization (i.e., CF adoption is not a good decision if the density is low), and 3) however though the density is low, the performance of CF is comparatively good when the clustering coefficient is low. We expect that these experiment results help firms decide whether CF recommender system is adoptable for their business domain with certain transaction data characteristics.