http://www.rsf.org/rubrique.php3?id_rubrique=20

Http://adsoftheworld.com/media/print/reporters_without_borders_the_internets_black_holes?size=_original

In 1985 the non-governmental organization Reporters Without Borders was formed in Montpellier, France.  The organization’s initial goal was to promote alternative news agencies.  After a period of infighting amongst the founders, the goal ultimately shifted to promoting “ the right to freedom of opinion and expression.”  RWB calls upon several documents, including the Universal Declaration of Human Rights to affirm their battle against information censorship.

The organization is responsible for proliferating literature, articles and various other forms of media pertaining to the global struggle against oppression. 

The second link listed above leads to a website of advertisements.  The advertisement presented is an interesting visual representation of the global Internet network.  It states that there are fifteen nations in the world in which news is not freely allowed to disseminate.  This simplified statistic presents the global network as one in which these fifteen nodes have essentially become ‘black holes.’  These fifteen nations have been labeled extreme offenders by RWB.  Each nation practices different levels, methods and ideologies regarding oppression.  For instance, in China Wikipedia.com and Google.com are both heavily regulated.  The Ministry of Public Security blocks all entries and keywords pertaining to democracy, freedom, human rights and censorship.  Their efforts have earned the title “The Great Firewall of China.” (Get it?) China’s closure to the outside world has received particularly stinging criticism because they are becoming an otherwise more progressive player on the world stage. 

In addition to releasing articles and media, Reporters Without Borders also releases an annual worldwide press freedom index.  The index is more substantive than the network image, and it also provides a numerical color-coded gradient which is far more informative. (See Below)  The global gradient effectively demonstrates the complexity and variety of censorship around the world.  The index however is not without its flaws.  The survey is formulated based on the responses from reporters stationed around the world.  Unfortunately, these respondents often times fall victim to governmental pressure, particularly within oppressive regimes.  Also, Reporters Without Borders has come under fire for taking funds from the National Endowment for Democracy, which in turn receives funding from the US State Department.  It has been argued that RWB has skewed information in a US backed smear campaign against non-compliant nations like Cuba and Venezuela. 

Despite these criticisms, Reporters Without Borders still galvanizes the debate about the global information network.

I have always been interested in sociopolitical phenomena commonly referred to as “red state, blue state.” The phrase circulates more and more in the coming months of a presidential election, and even more so afterwards. After the somewhat infamous 2004 election in which President Bush (eventually) edged passed Senator Kerry in a Florida recount, the “red state, blue state” phenomena became more of a controversy and less of an accepted realization of the American political demographic. At the epicenters of this controversy was a blogger who was (apparently) one of the first to notice the striking similarity between the 2004 Election Map and a map of the Free States ca. the Civil War. She commented on the similarity and posted both of the maps on her blog where eventually many prolonged discussions and heated debates ensued.

The general consensus that I found from reading the debates that were sparked from this blog post was that the 2004 Election results were widely a function of Rural/Suburban Vs. Urban voters. It just so happens that most rural populations are located in the south and far north, and most suburban populations in the Midwest. Compare this to the fact that most urban populations are in the Northeast and West and it’s no longer such a huge surprise that our 2004 Election results resemble a map of Free States from the Civil War.

However all of this begs the question, why did the election boil down to Rural Vs. Urban? Again the prevailing winds of digital opinion tend to agree that the 2004 election was heavily influenced by the moral and ethical opinions of Americans – more so than say the economy or education. And speaking in demographic generalities, it appears that rural & urban voters in 2004 had somewhat differing moral and ethical beliefs. So then the argument tends to go that rural states were inclined to vote for the Republican candidate because of that parties similar moral beliefs; the south & mid-west are rural, i.e. they vote red.

However I can’t help but wonder what network effects have lead to the current “red state, blue state” dynamic that we see every four years and if there is perhaps some structure to this process. The question can become even more involved (and exciting) when we consider the difference in social and political networks and interactions that take place in a rural vs. urban settings. One interesting question that I think a study of this phenomena could propose to answer would be “Why are people from large urban areas generally voting democratic.” Another interesting question would be to determine how the social networks of rural voters differs from that of urban voters and whether or not this difference is responsible for how a state votes.

I think the network of voting Americans is perhaps one of the most interesting networks to study because in a Democracy like ours, it’s the opinions of these networks that (in theory) decide the fate of our country. So when I see that the proximity of someone’s neighbors is determining the political landscape in such a way as to influence the presidency, I can’t help but wonder if the concepts we discuss in class such as weak/strong ties, balancing networks and closure processes are determining our democratic future. Is a disparity between rural and urban social/political networks the difference between voting democratic and republican?

http://sensoryoverload.typepad.com/sensory_overload/2004/11/free_states_vs_.html

Game theorists and economists have found themselves with a starring role in the ongoing 700 MHz spectrum auction. Not only were game theorists involved in structuring the FCC auction but have been hired by every major bidder in deciding their bidding strategy. Game theory was also central to Google’s efforts to change the rules to level the playing field between incumbent telecom operators and new entrants.Licenses to operate networks on the 698-804 frequencies are being sold by the FCC in 22 MHz segments and all across the country. What makes this spectrum particularly valuable is that these frequencies can propagate through walls and obstacles well allowing for reduced construction costs. Over 100 participants from cell phone companies like Verizon and AT&T to technology companies like Google are participating in the auction.

As described by the Forbes article, games theorists like Darin Lee, an economist and principle at the consulting firm LECG, have been hired as consultants to advise companies on bidding strategy. They advise management on how risks can be minimized and where the opportunities are to capture spectrum valued by the company. The theorists sometimes construct models and simulations of the auction to come up with strategies and decision trees for optimal strategies.

The format of an auction also can affect its outcome greatly. The FCC’s spectrum auction is quite similar to an English auction with increasing bids until only one buyer remain. To prevent collusion and increase competition the FCC has implemented a blind auctioning system. This makes it more difficult for the bidders to signal to each other their intentions to depress market prices. In past auctions for example bidders were know to places bids like $5,000,617 to indicate their interest in area code 617. This is particularly important as these companies are used to settling on the same prices for services such as text messaging.

Google is a company known for hiring economists and academics to consult on strategy and the spectrum auction was no exception. By analyzing the payoffs matrix for the various companies involved they noticed the uneven payoffs for large incumbents such as Verizon with existing networks and new entrants without an existing nationwide wireless network.

One factor for the difference are the associated risks with building out the network. An established operator faces only incremental costs in utilizing the additional spectrum. New operators on the other hand need to make all the investments such as towers, offices and advertising from scratch while still without customers. Because of the increased risks for smaller entrants, they cannot justify paying the same prices for a given license.

Another incentive for incumbents to pay more is to continue the monopoly rents they enjoy on existing assets.

About the 700 MHz Auction:

http://en.wikipedia.org/wiki/700_MHz_wireless_spectrum_auction

A Game Theorist’s Perspective:

http://www.forbes.com/2006/05/30/fcc-wireless-game_cx_ck_0531games.html

http://www.forbes.com/technology/2007/12/27/spectrum-auction-wireless-tech-wire-cx_ew_1231auction.html

Google’s Perspective - Leveling the payoff matrix and the playing field :

http://googlepublicpolicy.blogspot.com/2007/07/restoring-competitive-balance-to.html

http://googlepublicpolicy.blogspot.com/search/label/Telecom

With the obesity epidemic sweeping our nation by the thousands, health professionals have been as busy as ever and the media industry has followed not too far behind. The introduction of weight-loss reality shows took America by a storm. Most found it preposterous and controversial; they viewed it as an excuse to ridicule obese people and overwhelm them with shame in order for them to lose weight. However, considering the health benefits that these morbidly obese individuals could potentially benefit from, including dear life itself, could shame and humiliation be the solution to their lifelong struggle? Concepts from game theory will help answer this question.

According to Yale economics professor, Barry Nalebuff, if people “put themselves in a position that they don’t want to be in… they can take the action to rescue themselves”. This tactic is called the credible-threat theory, a contribution to the development of game theory, which Thomas Schelling of University of Maryland partially owes for winning him the Nobel Prize. The theory states exactly what it sounds it to be; a threat will only work if it is convincing and if there is absolutely no uncertainty that it will happen. Credible-threat theory was applied to the Cold War nuclear arms race where neither Russia nor America used a nuclear weapon because nuclear retribution would be guaranteed. This same theory was applied to a “Primetime” television news experiment that challenged overweight “players” to lose 15 pounds in two months. In this case the players would be the participants and the television network .The team was given a contract to sign stating that if this goal was not met, embarrassing pictures of themselves in tiny bathing suits would be seen on TV and posted all over the internet therefore their pay-offs would be to either lose 15 pounds or nation-wide humiliation. The participants either had a choice to lose or not lose the weight but according to the theory, so long as there is no doubt that the consequences would ensue; the individuals would shed at least 15 pounds. In this case, the contract had strong enough credibility to cause all participants to be successfully threatened.

The theory proved valid for the test was an overall success with only two members just falling short of losing 15 pounds. The contract had strong enough credibility to allow participants to believe that if they did not reach their goal, humiliating pictures would be exposed. “Primetime” however commended their hard work and decided to save the two individuals’ embarrassments and not to expose the incriminating pictures. This article got me thinking; could credible-threat theory be the future beacon of weight-loss?

http://abcnews.go.com/Primetime/Story?id=1725982&page=2

Imagine a list of every band. What if there was a way to link the bands based on similarity? Liveplasma.com does just that. The user can enter in his/her favorite band/artist and the site shows a graph of similar bands with the given band in the middle of the graph. Each artist has a bubble, the size of which depends on the popularity of the artist. Each bubble can be clicked, creating a new graph with the clicked bubble being at the center. This site can also be used for movies. Instead of inputting an artist, one can input a movie, actor, or director. Similarly to music, the site will display a graph linking similar movies based on topic and style.

Triadic Closure plays a significant role in these graphs. There are almost no examples where this property does not hold true. In music, if band A is similar to band B, and band B is similar to band C, band A could not be too different from band C. This is what separates music graphs from friendship graphs. In friendship graphs, triadic closure may not always hold true. Even if X is friends with Y and Y is friends with Z, X and Z may not be friends due to some sort of feud between them. The graphs that liveplasma uses are solely based on whether the nodes are similar or not.

In the world of media, there are three key players: the content creators, the consumers, and the distribution points.  The ‘distribution channel’ is then simply the path from the creators to the consumers.  In recent years, this model has gone through some extensive changes that have produced far reaching effects on the way we do business.  The biggest changes have come in the form of alternate distribution channels (both legal and illegal).  Arguably the biggest player to emerge from the fray has been iTunes.  The online-superstore is now accountable for 20% of all music sold in the United States.  As an online retailer this puts iTunes in a very interesting and powerful situation.  In the network of music distribution, iTunes acts as a trader.  It forms a distribution channel by connecting buyers and sellers, and as the dominant retailer in online distribution, it doesn’t have much competition with other traders in this realm.  iTunes thus retains a very strong position in the music distribution network.  As Forrester Research analyst James McQuivey sees it, “iTunes is totally in the driver’s seat on the music side […]. Everyone is terrified of Apple.”  As they should be.  If a trader has a lock on the only path between buyers and sellers, those buyers and sellers don’t have any real power because of their position in the distribution network.  The trader can set prices as they see fit and rake in as much profit as possible.  And indeed, this is exactly what Apple has done.  They’ve set a fixed price ($.99) for every song regardless of release date or artist, while simultaneously sitting in a strong position to negotiate profits with sellers.

 music.jpg        

   However, it is very interesting to note that Apple’s iTunes does not always have this coveted power position in media distribution. In the video distribution network, iTunes is struggling with the fact that it is one of many traders.  A fact that J.B. Perrette, President of Digital Distribution for NBC Universal appears to realize, noting “We’d love to figure out something with Apple, but frankly we have a lot of other alternatives [..]. While iTunes is a great service, it is not the only game in town.”  NBC’s content can no longer be found on iTunes. They insist that Apple is unwilling to negotiate it’s position, despite the fact that (when it comes to video) iTunes is far from unique.  Apple has tried to apply the same control and pricing schemas to the video market that it currently exercises in the music market.  This has led to less than desirable results.  While those in the music industry are able to swallow the slanted terms of iTunes distribution, more and more video producers are balking at those very same terms.  Part of this stems from the fact that, while on the surface, the markets appear very similar, their mechanisms for monetization are very different.  Music is monetized by payment for the product, while video is monetized through advertisements in the content.  Sellers in the video market are concerned with garnering big audiences, and they generally don’t care if that audience pays or not.  As long as there is a large viewership the company will make money from their advertisers.  For this reason studio execs don’t see the value in placing their episodes (without ads) on iTunes for a $1.99, especially when iTunes is only one of many distribution options.  As an example, CBS has teamed up with the likes of AOL, Joost, Sling Media, YouTube, MSNBC and Bebo to bring free content to buyers.  Similarly Hulu, a video site, has burst onto the market with free content primarily from Fox and NBC to very positive reviews from consumers.  

video.jpg       

       In the end, Apple is losing out on profits that it could be tapping into in the video market.  Apple is trying to leverage its strong position in the music distribution market, in the video distribution market where it holds significantly less power.  This really underscores the importance of position in any network and the role that it plays in negotiating power.  See http://www.wired.com/techbiz/media/news/2007/10/nbc_itunes for more information on the story. 

LAST MINUTE BIDDING AND THE RULES FOR ENDING SECOND-PRICE AUCTIONS: THEORY AND EVIDENCE FROM A NATURAL EXPERIMENT ON THE INTERNET

This paper was written by Alvin E. Roth and Axel Ockenfels (of Harvard Economics/Business Administration, respectively). While the latter part of their paper is very technical, the qualitative remarks posed by Roth and Ockenfels shed light on the nature of online auctions.

The paper explores a phenomenon that is not accounted for in introductory models of auction analysis — the practice of last-minute bidding (or sniping). The existence of this practice seems to be at ends with the game theory behind second-price sealed-bid auctions; it should be a best strategy to submit your maximum valuation for some item at any point in the auction. Why, then, does sniping happen so often? Does it have a place in a stable equilibrium? Roth and Ockenfels purport that it does. They go on to justify sniping by pointing out some of the key differences in a canonical second-price sealed-bid auction and the auctions that happen online.

The most obvious thing that our model does not account for is the time limit on bid submissions. Despite what we’ve learned in class, this actually can make a difference in strategy. For example, theres this notion of a community valuation for a good. That is to say that a set of bidders watching the maximum bid on an object rise might think something along the lines of “Everybody else wants this item…it must actually be better than I had originally valued it.” In doing so they will bid higher, and the cycle will continue for some time. But sniping circumvents this potential price war — not revealing your true value until the end could increase your payoff.

However, the story gets more complicated when you consider some additional dynamics. For example, there are services that will enter an eBay bid for you at the very last minute. Furthermore, there is a probability that the server will get too trafficked towards the ending time of the auction and that your last minute bid will not go through (and this will decrease the payoff for the sellers). Furthermore, sniping tends to happen more on certain types of objects than for others (i.e. frequently on antiques, not so frequently on certain technologies). The aforementioned paper explores these phenomena and concludes that sniping has a place in an equilibrium.

This paper is relevant to the class because it provides insight into the extent to which our models are accurate. It essentially takes something well defined in theory (a second-priced, sealed-bid auction) and analyzes it in a real-world context.

Link: http://www.fastcompany.com/magazine/91/debunk.html?page=0%2C0

During lecture we spent a lot time talking about different types of game theory. But are there really any situations in business that these payoffs really apply to. Not many people deal with two prisoners confessing or a dove and a hawk fighting over food. Sure there is a general way for all the topics to relate back to these types of games, but it’s not like people are really thinking about it this way. Plus in business, it is not like people are looking for a Nash Equilibrium, they just look to do what is best for their company.

The article discusses the panel that they held and how even a group of thirty game theorists could not actually come up with a real world that DIRECTLY applied to game theory. Sure there are plenty of real world examples that are metaphors in business, such as two divorce lawyers trying to each get their client what they want which could very much be like the Hawk-Dove Game. But even with these metaphors, they are fairly hazy parallels. Even if the parallels do exist fairly plainly, people are not applying game theory to figure out how they should act. They are acting on things that they know work based on the learning curve that each person has already established. Isn’t that the difference between a good and bad lawyer.

I think that the fact that some of the most respected game theorists could not come up with a real world application to game theory is enough evidence to say one may not exist. Although I do think that the parallels are evident as well as the theories associated with it are put into practice. Even though the business world really does not think in Nash Equilibriums or about the Prisoner’s Dilemma Game in context, these all set the learning curves and the rules which have come to rule the business world as it is today.

http://www.usatoday.com/travel/flights/2008-02-25-airport-incentives_N.htm

Boston’s Logan airport is in a city in which many site-seeing places are available.  However, the city is realizing that it is missing out on a lot of business simply because they do not offer any non-stop flights to Asia, Latin America, Africa, or the Middle-East.  This forces people to take connecting flights, which often people do not do out of laziness or extra cost of money. 

Logan airport has identified this problem and is offering “financial incentives for airlines to begin or expand service.”  However, with the skyrocketing fuel prices, airlines are skeptical about adding more routes.  Many airports have given incentives in the past such as reducing landing fees, rents, and chipping in on advertising to attract people to international destinations.

Airport executives claim that these added incentives help to open up more choices for the customer, stimulate the local economy, and help reduce fares due to the added competition.  The article claims that financial incentive programs have been around for a while, but with the increase in competition among airports, they are becoming more widespread.  The article claims that “incentives can ‘tip the scale’ in airline service decisions.”  It also claims that airport incentives have been helpful in helping airports that are steadily losing service to stay in business.  

This article is particularly interesting in the context of this class.  This is clearly a case of trying to achieve Nash Equilibrium.  We can think of this as the transportation/traffic networks that we learned in class.  People need to get from one place to another and must choose their route, or in this case, which airport to use that will take them to their destination.  With the new incentive program, new routes are available to travelers in which their payoff maybe increased from their current routes used.  As long as there is incentive for a person to choose a different airport, equilibrium has not been reached.  These incentive programs that airports are institutionalizing are doing just that: adding incentives for people to change from their current routes to a new route.  The new route may be from a closer airport than previously, the fare may be lower, or the flight may be non-stop instead of with layovers.  Whatever the case, these incentives increase the payoff for customers which cause customers to switch routes (airports).  As long as customers are finding incentive to switch, equilibrium has not been reached and airports start competing over customers’ business.  This added competition among airports also helps to drive down prices as airports try to undercut their competitor airports’ prices/routes to draw in business.  This also relates to some of the competition that we have been discussing in class.  Airports are competing to get the business of customers by lowering fares to stay in competition with their competitors (similar to how traders in trading networks decrease their ask prices to compete for business of the buyer).  This added competition serves to drive down prices.   

In class we discussed the theory of weak ties and strong ties, and the idea that a weak tie bridge is inevitably a powerful social connection because it opens up an entirely new set of resources to an existing strong-tie social network.  This reminded me of the role of public space as the site of encounter with strangers.  Architecture and urban design theorists argue that a place has a strong democratic, civic voice when its public spaces become the sites for exchange among diverse groups and individuals.  This can be observed in demonstrations and debates in public space, as well as the simpler encounters typical of “people-watching” and the posting of fliers and other signage.  In this way, a shared public space can be understood as an edge acting as a bridge between different strong-tied social networks. 

Critical to this argument is the ability for diverse individuals to share the same space at the same time, if only temporarily.  But what happens if the density of a place is so low that people rarely cross paths?  For example, in a suburban neighborhood, there are people outside in public spaces of all sorts; walking on the sidewalk, on their porches, in their front yards, etc.  However, they rarely interact with other people in these public spaces because the overall density of suburbia is extremely low.  Another very different example comes from urban spaces of transit, like a bus stop that sees a great deal of people pass through the same public space, but at different times.  This interaction is rare because it would need to be mediated through signage or other graffiti-like communication able to be read by different people passing through the same space over time.

Recently, the marriage of physical public space and digital public space through ubiquitous computing technologies has created the potential to resuscitate these low-density public spaces as the site for encounter among diverse individuals and groups, and potentially the formation of weak-tie bridges between them.  Here, public space is treated as a hybrid digital/physical space that either spans distance or time in order to increase the density of individuals sharing a social exchange.  The following link describes one of the early projects that set the course for future work developing digital/physical public spaces.  In this example, communication among diverse groups takes place across different locations at the same time, becoming a bridge between networks and forging weak ties:  http://www.ecafe.com/getty/table.html