Game theory has been applied to many abstract networks in the course, from trading networks to social networks. One example that merits further investigation is a wireless ad hoc network.

Wireless ad hoc networks can easily be understood with the concepts presented in this class. Computers are nodes in the network and wireless radio links are the edges of the network. The network is called “ad hoc” because the wireless radio links are dynamically created based on the physical proximity of one node to another (e.g. the two nodes can reach each other over the wireless radio).

Unique problems arise in ad hoc networks. For example, since the topology of the network is dynamic, the shortest path from one node to another node may constantly be changing. In fact, changes in the network topology might sever one part of the network from the other. Also, since the network passes messages from one node to another via multi-hop routing, certain nodes may be more heavily burdened than other nodes.

For example, consider the situation where a node sits in a “powerful” position in the network (e.g. the red node). This is similar to the situation discussed in class, where one person is the unique link between two different social networks, so that information flows exclusively through that person. While in a social network this may be an enviable position, being a node that has high “betweenness” value can cause problems in a wireless ad hoc network.

First, having such a critical node is bad from a fault tolerance viewpoint. If that one node is destroyed, two network separates into two separate subgraphs that cannot communicate with each other.

Second, this critical node will have to ferry vast quantities of information from one side of the network to the other. If the nodes were part of a wireless sensor network, each node may have a limited power supply (e.g. a small coin battery). For each message that it relays, the node loses a little bit of power, and with the increasing number of messages, the node will rapidly run out of power.

Recall the four node network discussed in network exchange theory (a-b-c-d). The terminal nodes on the four node network (a and d) were at the mercy of the more powerful nodes in the center (b and c). An idea was briefly mentioned in lecture where node d may choose to forgo an exchange with node c and instead work on forming a link with either b or a.

In a real world wireless ad hoc network, this is a possibility. The two nodes at the top of the graph can improve the overall connectivity of the network by boosting their signals to form a link (marked in dashed red). While this requires more energy than the shorter hop to an adjacent node, this helps avoid having only one path between the two networks.

Game theory can be employed in wireless networks to help induce a socially optimal equilibrium (directly analogous to the joint strategy in a two player game that is social welfare maximizing). Each node has a choice to relay a message or not. By help relay the message, the node reduces its energy supply, but by not participating, it hurts the overall throughput of the network. Researchers can modify the utility function (a way to compute the payoff) of each node to help balance between these two choices to ensure the health of a wireless ad hoc network. Some ideas that have been suggested include providing incentives for participating, such as virtual currency (e.g. I’ll pass on your message, but you owe me one.). Other ideas include disincentives for not participating, such as quid pro quo (e.g. If you don’t pass on my message, I won’t pass on yours either.).

The optimal solution is still an open research question. For a broad overview of this topic, “Using Game Theory to Analyze Wireless Ad Hoc Networks” by Srivastava et. al. provides a basic overview of game theory and its applications to wireless ad hoc networks. The presentation “Forwarding incentives for wireless networks” by Vivek Raghunathan provides examples and references to further literature on the specific topic of packet forwarding in wireless ad hoc networks.

On February 27, 2007 the Dow Jones Industrial Average plummetted 416 points–at one point in the day it had fell 546 points, it’s worst drop in a single day in over 5 years. Part of the drastic decline was that the market was oversaturated after record increases in the previous weeks. This decline has mostly been attributed to the fact that the Fed released a series of statements indicating that interest rates were going to remain constant. But the most important reason that the market crashed was because the Chinese markets dropped over 9% before the market opened. That was the impetus that sent our financial markets into disarray.

This is an interesting example for our class because it shows a strong tie between the American and Chinese markets. Many analysts would have predicted that while there was certainly a tie, that it was not strong enough to send the Dow down 546 points. It also brings to question the importance of power in relationships. China is clearly incredibly important to the stability of our financial system.

That’s worth a little thought, but the best connection to our course is about how there was a failure in the electronic part of the market. This ties in well to the handout on the Hybrid Market. At about 3:00PM the Dow dropped 200 points instantly because of failures in the computer systems, which brings to question whether or not it’s really worth it to integrate computers into the NYSE.

Link to article about article:

How the social network shapes the economy 

By Ross Gittins

http://www.theage.com.au/news/Ross-Gittins/How-the-social-network-shapes-the-economy/2005/04/22/1114152322760.html

Link to actual 35 page academic article:

The Impact of Social Structure on Economic Outcomes

By Mark Granovetter
http://www.stanford.edu/dept/soc/newsite/people/faculty/granovetter/documents/JEPGranovetterMay2004version.doc

In his academic article, Granovetter presents an interdisciplinary approach to economic theory, focusing on the contribution of sociologists to the field of economics. He argues that the economic events do not happen in a vacuum, separate from social influence. (Which is basically the idea this whole course is founded on!). If an applicable, reliant theory is to be made, then sociology must be factored in.

Social networks affect the economy for three reasons. Firstly, humans rely more on information from people they know rather than impersonal sources. Second, as social animals, humans reap a system of reward and punishment from others around them. Third, social networks cultivate a system of trust that produces actions contradictory to what would be predicted by a purely economic model.

The article also presents four core principles that tie economy and sociology together. First, is the principle that the denser a network, the more likely it is to develop and internalize trust and a set of social norms. This is relevant to the free-rider problem of economics, as such a problem is more likely to arise the larger, and thus less dense, a network gets. Second, is the idea of the strength of weak ties (that we’ve all read about). Related to this principle is the significance of structural holes, in which individuals with ties that bridge otherwise separate networks are able to exploit structural holes. Lastly, is the social embeddedness of an economy, which is the extent to which economic actions are intertwined by non-economic actions. Social embeddedness can express itself in many ways. For example, social networks produce an economic byproduct when relatives and friends help one another find employment for non-economic motives.

Thus, Granovetter proves that social networks and economy are inextricably tied. This makes sense, because even the biggest theory extrapolates from the individual level. And an economic theory that extrapolates from an isolated individual that only considers personal economic payoffs is built on an inaccurate base. Humans are fundamentally social animals, and thus, this aspect of our lives will affect what we do economically. Social networks can help streamline the economy, cutting costs for advertising by replacing it with word of mouth and recommending new employees.

Link to article about article:

How the social network shapes the economy 

By Ross Gittins

http://www.theage.com.au/news/Ross-Gittins/How-the-social-network-shapes-the-economy/2005/04/22/1114152322760.html

Link to actual 35 page academic article:

The Impact of Social Structure on Economic Outcomes

By Mark Granovetter
http://www.stanford.edu/dept/soc/newsite/people/faculty/granovetter/documents/JEPGranovetterMay2004version.doc

In his academic article, Granovetter presents an interdisciplinary approach to economic theory, focusing on the contribution of sociologists to the field of economics. He argues that the economic events do not happen in a vacuum, separate from social influence. (Which is basically the idea this whole course is founded on!). If an applicable, reliant theory is to be made, then sociology must be factored in.

Social networks affect the economy for three reasons. Firstly, humans rely more on information from people they know rather than impersonal sources. Second, as social animals, humans reap a system of reward and punishment from others around them. Third, social networks cultivate a system of trust that produces actions contradictory to what would be predicted by a purely economic model.

The article also presents four core principles that tie economy and sociology together. First, is the principle that the denser a network, the more likely it is to develop and internalize trust and a set of social norms. This is relevant to the free-rider problem of economics, as such a problem is more likely to arise the larger, and thus less dense, a network gets. Second, is the idea of the strength of weak ties (that we’ve all read about). Related to this principle is the significance of structural holes, in which individuals with ties that bridge otherwise separate networks are able to exploit structural holes. Lastly, is the social embeddedness of an economy, which is the extent to which economic actions are intertwined by non-economic actions. Social embeddedness can express itself in many ways. For example, social networks produce an economic byproduct when relatives and friends help one another find employment for non-economic motives.

Thus, Granovetter proves that social networks and economy are inextricably tied. This makes sense, because even the biggest theory extrapolates from the individual level. And an economic theory that extrapolates from an isolated individual that only considers personal economic payoffs is built on an inaccurate base. Humans are fundamentally social animals, and thus, this aspect of our lives will affect what we do economically. Social networks can help streamline the economy, cutting costs for advertising by replacing it with word of mouth and recommending new employees.

Link to article about article:

How the social network shapes the economy 

By Ross Gittins

http://www.theage.com.au/news/Ross-Gittins/How-the-social-network-shapes-the-economy/2005/04/22/1114152322760.html

Link to actual 35 page academic article:

The Impact of Social Structure on Economic Outcomes

By Mark Granovetter

http://www.stanford.edu/dept/soc/newsite/people/faculty/granovetter/documents/JEPGranovetterMay2004version.doc

In his academic article, Granovetter presents an interdisciplinary approach to economic theory, focusing on the contribution of sociologists to the field of economics. He argues that the economic events do not happen in a vacuum, separate from social influence. (Which is basically the idea this whole course is founded on!). If an applicable, reliant theory is to be made, then sociology must be factored in.

Social networks affect the economy for three reasons. Firstly, humans rely more on information from people they know rather than impersonal sources. Second, as social animals, humans reap a system of reward and punishment from others around them. Third, social networks cultivate a system of trust that produces actions contradictory to what would be predicted by a purely economic model.

The article also presents four core principles that tie economy and sociology together. First, is the principle that the denser a network, the more likely it is to develop and internalize trust and a set of social norms. This is relevant to the free-rider problem of economics, as such a problem is more likely to arise the larger, and thus less dense, a network gets. Second, is the idea of the strength of weak ties (that we’ve all read about). Related to this principle is the significance of structural holes, in which individuals with ties that bridge otherwise separate networks are able to exploit structural holes. Lastly, is the social embeddedness of an economy, which is the extent to which economic actions are intertwined by non-economic actions. Social embeddedness can express itself in many ways. For example, social networks produce an economic byproduct when relatives and friends help one another find employment for non-economic motives.

Thus, Granovetter proves that social networks and economy are inextricably tied. This makes sense, because even the biggest theory extrapolates from the individual level. And an economic theory that extrapolates from an isolated individual that only considers personal economic payoffs is built on an inaccurate base. Humans are fundamentally social animals, and thus, this aspect of our lives will affect what we do economically. Social networks can help streamline the economy, cutting costs for advertising by replacing it with word of mouth and recommending new employees.

Link to article about article:

How the social network shapes the economy 

By Ross Gittins

http://www.theage.com.au/news/Ross-Gittins/How-the-social-network-shapes-the-economy/2005/04/22/1114152322760.html

Link to actual 35 page academic article:

The Impact of Social Structure on Economic Outcomes

By Mark Granovetter

http://www.stanford.edu/dept/soc/newsite/people/faculty/granovetter/documents/JEPGranovetterMay2004version.doc

In his academic article, Granovetter presents an interdisciplinary approach to economic theory, focusing on the contribution of sociologists to the field of economics. He argues that the economic events do not happen in a vacuum, separate from social influence. (Which is basically the idea this whole course is founded on!). If an applicable, reliant theory is to be made, then sociology must be factored in.

Social networks affect the economy for three reasons. Firstly, humans rely more on information from people they know rather than impersonal sources. Second, as social animals, humans reap a system of reward and punishment from others around them. Third, social networks cultivate a system of trust that produces actions contradictory to what would be predicted by a purely economic model.

The article also presents four core principles that tie economy and sociology together. First, is the principle that the denser a network, the more likely it is to develop and internalize trust and a set of social norms. This is relevant to the free-rider problem of economics, as such a problem is more likely to arise the larger, and thus less dense, a network gets. Second, is the idea of the strength of weak ties (that we’ve all read about). Related to this principle is the significance of structural holes, in which individuals with ties that bridge otherwise separate networks are able to exploit structural holes. Lastly, is the social embeddedness of an economy, which is the extent to which economic actions are intertwined by non-economic actions. Social embeddedness can express itself in many ways. For example, social networks produce an economic byproduct when relatives and friends help one another find employment for non-economic motives.

Thus, Granovetter proves that social networks and economy are inextricably tied. This makes sense, because even the biggest theory extrapolates from the individual level. And an economic theory that extrapolates from an isolated individual that only considers personal economic payoffs is built on an inaccurate base. Humans are fundamentally social animals, and thus, this aspect of our lives will affect what we do economically. Social networks can help streamline the economy, cutting costs for advertising by replacing it with word of mouth and recommending new employees.

Link to article about article:

How the social network shapes the economy 

By Ross Gittins

http://www.theage.com.au/news/Ross-Gittins/How-the-social-network-shapes-the-economy/2005/04/22/1114152322760.html

Link to actual 35 page academic article:

The Impact of Social Structure on Economic Outcomes

By Mark Granovetter

http://www.stanford.edu/dept/soc/newsite/people/faculty/granovetter/documents/JEPGranovetterMay2004version.doc

In his academic article, Granovetter presents an interdisciplinary approach to economic theory, focusing on the contribution of sociologists to the field of economics. He argues that the economic events do not happen in a vacuum, separate from social influence. (Which is basically the idea this whole course is founded on!). If an applicable, reliant theory is to be made, then sociology must be factored in.

Social networks affect the economy for three reasons. Firstly, humans rely more on information from people they know rather than impersonal sources. Second, as social animals, humans reap a system of reward and punishment from others around them. Third, social networks cultivate a system of trust that produces actions contradictory to what would be predicted by a purely economic model.

The article also presents four core principles that tie economy and sociology together. First, is the principle that the denser a network, the more likely it is to develop and internalize trust and a set of social norms. This is relevant to the free-rider problem of economics, as such a problem is more likely to arise the larger, and thus less dense, a network gets. Second, is the idea of the strength of weak ties (that we’ve all read about). Related to this principle is the significance of structural holes, in which individuals with ties that bridge otherwise separate networks are able to exploit structural holes. Lastly, is the social embeddedness of an economy, which is the extent to which economic actions are intertwined by non-economic actions. Social embeddedness can express itself in many ways. For example, social networks produce an economic byproduct when relatives and friends help one another find employment for non-economic motives.

Thus, Granovetter proves that social networks and economy are inextricably tied. This makes sense, because even the biggest theory extrapolates from the individual level. And an economic theory that extrapolates from an isolated individual that only considers personal economic payoffs is built on an inaccurate base. Humans are fundamentally social animals, and thus, this aspect of our lives will affect what we do economically. Social networks can help streamline the economy, cutting costs for advertising by replacing it with word of mouth and recommending new employees.

Link to article about article:

How the social network shapes the economy 

By Ross Gittins

http://www.theage.com.au/news/Ross-Gittins/How-the-social-network-shapes-the-economy/2005/04/22/1114152322760.html

Link to actual 35 page academic article:

The Impact of Social Structure on Economic Outcomes

By Mark Granovetter
http://www.stanford.edu/dept/soc/newsite/people/faculty/granovetter/documents/JEPGranovetterMay2004version.doc

In his academic article, Granovetter presents an interdisciplinary approach to economic theory, focusing on the contribution of sociologists to the field of economics. He argues that the economic events do not happen in a vacuum, separate from social influence. (Which is basically the idea this whole course is founded on!). If an applicable, reliant theory is to be made, then sociology must be factored in.

Social networks affect the economy for three reasons. Firstly, humans rely more on information from people they know rather than impersonal sources. Second, as social animals, humans reap a system of reward and punishment from others around them. Third, social networks cultivate a system of trust that produces actions contradictory to what would be predicted by a purely economic model.

The article also presents four core principles that tie economy and sociology together. First, is the principle that the denser a network, the more likely it is to develop and internalize trust and a set of social norms. This is relevant to the free-rider problem of economics, as such a problem is more likely to arise the larger, and thus less dense, a network gets. Second, is the idea of the strength of weak ties (that we’ve all read about). Related to this principle is the significance of structural holes, in which individuals with ties that bridge otherwise separate networks are able to exploit structural holes. Lastly, is the social embeddedness of an economy, which is the extent to which economic actions are intertwined by non-economic actions. Social embeddedness can express itself in many ways. For example, social networks produce an economic byproduct when relatives and friends help one another find employment for non-economic motives.

Thus, Granovetter proves that social networks and economy are inextricably tied. This makes sense, because even the biggest theory extrapolates from the individual level. And an economic theory that extrapolates from an isolated individual that only considers personal economic payoffs is built on an inaccurate base. Humans are fundamentally social animals, and thus, this aspect of our lives will affect what we do economically. Social networks can help streamline the economy, cutting costs for advertising by replacing it with word of mouth and recommending new employees.

The initial evidence for the importance of weak ties came from studies of how people found jobs however the theory applies to other situations. Read the rest of this entry »

http://www.nytimes.com/2007/02/25/business/yourmoney/25proto.html?ex=1173243600&en=66a8673994e7a9d5&ei=5070 

This article describes recent quorum sensing research in bacteria and its connection with social networks.  Quorum sensing is the ability of bacteria groups to communicate and coordinate behavior through signaling molecules and pathways.  This phenomenon is what enables bacteria colonies to accumulate enough bacteria to act, developing infections, illnesses, and biofilms.  Studying quorum sensing has led many researches into drug development with the basic principle that disrupting network communication will also disrupt bacteria function.  The early discoveries regarding this type of research by Professor Bonnie Bassler from Princeton is compared to the social networking efforts that preceded such companies like MySpace and Facebook. 

This article only briefly introduced the area of research as a developing field full of questions, but it would be interesting to see how principles of social networks may have powerful applications in drug development and medicine.  Since this area is studying bacteria networks and not human networks, there would be a whole new set of rules for nodes and edges to follow that would have to take into account biological and biochemical mechanisms as well as basic chemical properties of human physiology.  The application of social networks provides a novel but powerful perspective through which existing problems can be seen from a new angle.  It seems very conceivable that fundamental principles of social networks among humans can be used as a foundation to study networks in all sorts of other applications in the future.