Homophily Theory

This link discusses the theory of homophily. This theory states that “most human communication will occur between a source and a receiver who are alike.” In layman’s terms it is the theory of why birds of a feather flock together. The article describes why this is: namely that communication flows more freely when the […]

Braess’ paradox deals with networks where when users selfishly choose the best route, under certain circumstances, adding additional capacity increases travel time. We also applied the concept of Nash equilibrium to analyze Braess’ paradox. A Stanford professor Sunil Kumar explores the question of how to increase capacity and throughput without risking increasing delays […]

http://www.gametheory.net/News/Items/108.html
http://www.cscs.umich.edu/~crshalizi/notebooks/ethics-biology.html
 
Where are Irrationality, Justice, and Morality in Game Theory?
 
The entire field of game theory seems to be built upon the concept of rationality. In each situation, players will play the strategy which maximizes their individual payoff. Any experience with the real world however, will lead us to the conclusion that this assumption is inherently flawed […]

Here’s a practical application of the bargaining networks that we’ve been discussing recently, and it touches back on the stock market lectures. This article in the New York Times, “When Unequals Try to Merge as Equals“, is about the upcoming (pending approval) merger of the Sirius and XM satellite radio companies. The crux of the […]

This Business Week article, Peer Innovation and Production discusses the value of opensouce software and how large companies such as IBM whose business models initially revolved around proprietary software are now using the wisdom of crowds as initially experimented with Linux. Many non-software companies are looking at this idea of harnessing peer production as a […]

http://www.cs.washington.edu/homes/pedrod/papers/kdd01a.pdf
Often when companies go about mining for potential customers to market to, they estimate their expected value from a particular customer as the expected profit less the cost of marketing. What the companies do not usually consider is the network value of the potential customer, that is, the expected revenue garnered as a result […]

In class we used a preferred-seller graph to model an ascending bid auction of multiple items, where the number of items and bidders is the same. Later, we adapted it for the auctioning of one item by adding “fake” items for which each bidder’s valuation is zero. However, not all types of auctions are easy […]

Source: Internet Advertising and the Generalized Second-Price Auction: Selling Billions of Dollars Worth of Keywords by Benjamin Edelman, Michael Ostrovsky, and Michael Schwarz
Pay-Per-Click advertising is the primary source of revenue for internet search companies such as Yahoo and Google. When a user enters a search query, advertisements to sites that match the query are returned […]

In class we have discussed in good detail second-price sealed bid auctions. It’s easy to see that the deciding factors in the simple cases we looked at are purely economic. The optimal strategy for any bidder is to bid their private value - any more and they might pay too much, any less and they […]

In class we have gone over four main types of auctions: ascending bid, descending bid, first priced sealed bid and second price sealed bid. So far our discussions have focused on independent private values for individual items, but what if there are multiple items and bidders have different valuations depending on what combination of items […]