The link above discusses how a nation’s or corporation’s culture can affect buyer seller relationships and whether a buyer repurchasing with a particular seller is affected by culture. The researcher’s surveyed various corporations in the United States and Latin America.

This is not to say that key characters such as strength of ties between two companies, trust, and reliability are not important. On the contrary, these are paramount to the decision as to whether a buyer purchases a product from a seller. If a buyer is getting a good deal or if other companies recommend a particular seller, the buyer is not likely to choose another seller. However, the paper found that there are some aspects of a nation’s or corporation’s culture that affect whether a buyer repurchases (or starts purchasing) from a seller. Many times, a nation’s culture will determine a buyer or seller runs the business. For instance, in Europe there may be more of a break during the work day than in the United States. Buyers are more likely to purchase products from people who have a similar mindset when running a business. This is not limited to national culture, corporate culture also affects whether a buyer purchases a good. A large corporation’s prime purpose may be to make capital and thus they always take the best deal regardless of the relationship with the seller. Smaller companies may pay more, but have a reliable relationship with the seller.

In its conclusion, the paper found that there are a few cultural characteristics that may lead a buyer to purchase from a seller. Among these are cultures that allow risk taking, understand the importance of social hierarchies and have a philosophy that thinks about the future.

This paper led me to think about how so many businesses are different and how many different reasons there are why a relationship forms or breaks apart. Some times a relationship may not form as a result of the buyer and seller being on two different sizes. Some companies stay with a neutral relationship even though a better one may be just two edges away. A company may form a relationship with another company through a hatred for a competitor (ie: a merger). Today, the number of reasons a relationship between companies form is growing. With the creation of the internet, a great deal of companies can stay connected, when otherwise cultural barriers may block them.

Examining “Power Auctions and Network Constraints”

http://ieeexplore.ieee.org/iel4/5350/14469/00663223.pdf?tp=&isnumber=&arnumber=663223

 ECON 204 has thus far been presented as an introductory course, with most students being introduced to the general principles of networks for the first time.  With this in mind, it is natural to assume that we would have little understanding of network systems of any significant complexity.  However, the Pacific Gas and Electric Company’s paper “Power Auctions and Network Constraints” references nearly all of the material covered so far in class in a discussion of perhaps one of the world’s most important networks:  the electrical power network.  By applying fundamentals of game theory, graph theory, and auction theory, the authors are able to develop a reasonable model of the strategic options of producers and consumers (buyers and sellers, respectively) in the power system.    

According to Singh, Hao, and Papalexopoulos, the electrical power network can be simplified to a model very similar to ones we have studied in class.  In this model, the power grid consists of two types of nodes (producers/sellers of electrical power, and consumers/buyers of electrical power), connected by edges (transmission lines).  To make the model more accurate, the authors include possible restrictions on the network, including maximum output levels of individual generators and transmission limits on edges.  In doing so, they observe that in order to choose prices at which to buy and sell electricity, they must participate in a game almost identical to those we studied in class.  (The authors even go so far as to compare one example to the Prisoner’s Dilemma problem.)  The examination that follows concludes that all players in these games will follow similar strategies in an attempt to maximize payoffs, resulting in situations where there exists a clearly defined Nash equilibrium.  Though this idea has implications for businesses directly involved with the power network, the real importance of this paper (for our purpose) is the realization that even though we have been examining network theory on a mostly rudimentary level, the concepts that we have learned are powerful enough to have surprising implications in extremely complicated scenarios.

http://mathforum.org/isaac/problems/bridges1.html

I wanted my first blog posting to get back to the roots of graph theory because the mathematics behind graphs and the number theory behind the mathematics is what fascinates me the most.  “The Seven Bridges of Konigsberg” and Euler numbers are one of the base principles when studying the math and number theory behind networks.  The website does an excellent job of explaining the basis of the problem, but I would like to show how it relates to the class. 

As it says on the web site, it is not possible to cross all of the bridges of the original problem only once.  This is similar to phenomena in class with triadic closure, directed connectedness of graphs and even the Braess paradox.  If we consider a node on each far end of a bridge, using either directed or undirected edges, there is no way to make the graph connected without having two edges between nodes (pending the condition that we can’t use an edge twice).  Having this ‘extra edge’ creates an increase in travel time that would be experienced to create this Braess paradox in the directed graph.   It also creates a lack of need for a bridge, as shown in the website.  At least one of the bridges is creating excessive travel time for the people of Konigsberg.  We can also view the number and direction of edges as a need to form strong/weak ties, or to look into power in social networks.  Certain edges must be traveled more than others, some must have power and some must be strong ties.

I am sure that most people in this class have had enough math classes to know about this, so I am keeping the blog brief.  It truly amazes me how much can be inferred about networks and about math from looking at such a basic map of a town.  This one example has been the basis for numerous proofs and a prime example of almost everything we have learned thus far in INFO 204.

In the article, Cash In On Your Social Network, Joanna Glasner looks at online recruiting services, such as Jobster and H3.com that uses social networks to fill job positions, by offering cash for referrals and invitations by and for prospective job applicants. Companies such as Starbucks and Nordstrom use Jobster to have employees refer their connections in their social networks. This is a valuable ability for companies to search for prospects who have employee connections as well as to search for people who already have jobs elsewhere, widening their search field. It also can supplement headhunting firms and replace recruiters.

This article shows how social networks employment opportunities, much as in the case of what we discussed in class as the “strength of weak ties” are based more on weak ties than the strong ties of a close-knit network. A new edge can lead to a whole new group of acquaintances. These online services serve to close social networks by forming edges between less sociable employees and prospective employers.

BoingBoing, Digg, Fark, MetaFilter, Protrade, Wikia, YTMND. Aside from being some of the biggest powerhouses on the web, what else do these media giants have in common? Over the past few years, these websites have risen up to attain rather influential positions in the hierarchy of internet traffic and information distribution. That sort of thing doesn’t happen overnight. Each had to start small, with only a few connections to the rest of the internet. As time passed, these websites forged more and more connections with other sites, blogs, newsrings, etc, all the while accumulating a growing audience. As they increased in popularity, other media outlets began to reference and link to them, bolstering the numbers of their followers even more. However, the question still stands; how did the authors of these sites get this chain reaction started?

“Conversational marketing” is a term coined by Federated Media Publishing- a leading supporter of independent media. Essentially, conversational marketing “[brings] marketers into an active dialogue with their customers.” As explained in their mission statement, Federated Media’s goal is to connect independent website authors and audiences to marketers. The ramifications of these connections are quite significant. Additional revenue earned through advertising obviously brings direct benefits to the website’s authors, but the long-term network patched together through Federated Media provides long lasting benefits.

Consider the situation where author A and author B both go to Federated Media Publishing for support. Applying triadic closure to FM’s clients, we see that if two websites are strongly linked to Federated Media, a new “edge” (in this case, a hyperlink or a reference) will most likely be created between the two authors. If the link between these authors becomes stronger, then A’s contacts will most likely “meet” B, just as B’s contacts will most likely “meet” A. This kind of cross-networking multiplies the number of both A’s and B’s contacts drastically. The additional traffic generated by hotlinks leads to more exposure to any advertising present on that website, thus generating even more revenue.

We see that through an intermediary such as Federated Media Publishing, burgeoning independent authors have the opportunity to create vital network connections. By creating a community of similar minded authors, marketers can better delineate the needs of the target audience. Chas Edwards of Federated Media aptly summarizes this point,

The expanded sales organization enables FM to do what it does best:
service brand advertisers. Bringing marketers into an active dialogue with
their customers -- what we call 'conversational marketing' -- requires
listening, creative thinking and, above all, human insight...

Reaching millions of anonymous eyeballs is one thing. Ensuring that a
marketer's message lands in a high-quality, relevant, and safe environment
is another thing entirely.

In their paper, Last-Minute Bidding and the Rules for Ending Second-Price Auctions: Evidence from eBay and Amazon Auctions on the Internet Alvin Roth and Axel Ockenfels examine the effects of different rules on the ending of second price auctions. While eBay uses a fixed end time for its auctions, Amazon’s system automatically extends an auction beyond its original end time until ten minutes have passed without bid activity. While this difference may seem slight, it has significant effects on bidders’ strategy. Though last-minute bidding, known as “sniping,” is discouraged by both sites, in appears eBay’s rules offer strategic incentives for its users to do just that.

As we learned in class, bidding your true value is a dominant strategy in a second price sealed bid auction. However, in an eBay auction the user also has to consider the time component. When is it most advantageous for a user to place a bid? The authors note that other inexperienced users may confuse eBay for an ascending price auction and continually raise their bids so that they stay on top. In this case, it may be advantageous for other users to refrain from bidding until the final moments in order to avoid a bidding-war. In addition, bidding earlier on could inform other users about your valuation of the item. While the amount is kept private, users are aware of the current second-price and whether they are winning or not. In categories such as antiques, this could cost you an excellent bargin. As a result, in an eBay auction it is not a dominant strategy to bid your true value early on.

The prediction that sniping offer a strategic advantage is confirmed by comparing it to Amazon auctions. Since Amazon will the extend the auction if there is activity close to the end time, the advantages of sniping at the last minute are negated. The data presented in the paper is compelling. A comparison of computer-related auctions on eBay and Amazon showed that 40% of eBay auctions vs. 3% of Amazon auctions have last bids within 5 minutes of closing. Clearly, it is important to consider not only the amount of your bid, but also your timing when determining your best bidding strategy on eBay.

Note: This was also posted on my own blog: http://aysz88.livejournal.com/27137.html . It may look better there.

In the February 16, 2007 issue of Science, Brendan J. Frey and Delbert Dueck apply “message-passing” networks to a problem that doesn’t seem particularly natural in that context: how does one cluster large numbers of objects, and then find the “center” object of each cluster? For example, can you create an algorithm that clusters images of faces, genes, airports, or even “sentences in [their] manuscript”?

(The article is linked at http://www.sciencemag.org/cgi/content/abstract/315/5814/972. I think all computers within the Cornell domain can access it for free; I’m not sure whether it’s free for those outside. There actual journal article is linked on the left sidebar. There are also links to a “perspective” on the article by Marc Mézard below the abstract - those links won’t take you to the actual article in question.)

Abstractly, the problem involves having a set of nodes and wanting to find a set of centers (”exemplars” ) such that the errors are minimized. (Any ways of measuring error seems to work just as well.) In their article, they explain that the previous popular method first selects a set of possible exemplars and then refines the set in each iteration, but that method does not always converge to the same set of exemplars - selecting a different initial set affects the results. Their algorithm, they claim, vastly improves on the previous one.

Their new algorithm, which they call “affinity propagation”, ends up being extremely powerful - a single run of their algorithm (while matching faces) beats out the best result for 10,000 randomly-initialized runs of the old method (see their Figure 2). They describe this as “two orders of magnitude” better. In their Figure 3, they graph how a single run of their algorithm on DNA also produces results far better than 10k runs of the old algorithm.

We’ve just started working with the Internet as a network - one could perhaps apply this to characterize whole sections of the Internet, if one could define a way to quantify the similarity of pages on the Internet. Or, more-practically, a search engine could cluster their search results into groups of similar results - a search on “Washington”, for example, might be automatically clustered into pages on the president, the state, or the city. An advantage here is that the algorithm doesn’t even need to know how many clusters to use - it can dynamically determine this using an abstract “how much does a node want to be a center” value.

Here is how the algorithm works, in an attempt to express the algorithm at a high level without using the “guardian angels pointing” analogy of Mézard’s “perspectives” article.

Read the rest of this entry »

In my previous post, I had mentioned an online revolution known as web 2.0 and I had only created a directed edge from this blog to the wikipedia page. While I was reading one of my subscribed blogs, Presentation Zen, I stumbled across this post which shows how text can be used for an effective video presentation. One of the videos (the other videos are all good, especially the first Pulp Fiction one) tries to explain web 2.0 in a different way- video text.

Watch it here

The message is simple: the web is no longer just linking information- web 2.0 is linking people.

If you click onto the Youtube link, the author has given the title of his video: “The web is us/ing us.”

In class we have begun to discuss how web sites hyperlink with each other and a low estimate of 10B sites was tossed out there. It is already impossible to imagine what that network looks like. But now, try adding people in for nodes as well.

The basis for the authors claims is simple. XML facilitates data exchange. When people organize web data through photos (flickr), blogs, videos (youtube), and bookmarks (del.icio.us and digg), they are forming a database-backed web.

When we tag and post pictures… we are teaching the Machine… Each time we forge a link… we teach it an idea…

The web is no longer just linking information; Web 2.0 is linking people. Therefore, we are in control and we’ll need to rethink ourselves and the data we are putting online, which will, invariably, be linked back to us.

In the CNET article found here the author discusses how the recent boom in network research has led to startling revelations in the mathematics of network theory. Network mathematics, a field in the past studied primarily by physicists and mathematicians, is growing in complexity thanks to the collaborative efforts of sociologists, statisticians, and many other fields. The article argues that with continued research network mathematics may be as influential and robust as Newton’s Laws of Motion, and that those with the proper understanding of this field will be able to easily transfer that knowledge into profitable application in the “real world”.

One currently used application of network mathematics are the Nobel Prize-winning Black-Merton-Scholes option-pricing equations. The math used was a key component for creating options as well as a diagnostic tool for analyzing them. Some of the more clever analysts could use the equations to find “hidden options” in financial instruments and extract extra profits from them, or, alternatively, use the equations to customize innovative financial instruments for their clients. Because of the strength of these equations a significant number of companies are using real options as mathematical tools for pricing the risks associated with their own business investments.

Future applications of network mathematics could yield even greater results than with the option- pricing equations. Scientists and innovators will be able to search for “hidden networks” within complex systems to figure out whether those networks are being heavily burdened or incidentally underexploited (garnering excess profits). This type of analysis will drastically change how organizations handle their networks to manage value. In fact, individuals and institutions alike may be able to produce on the spot network activity to improve efficiency, reliability, and exploit opportunity, similarly to the way Black-Merton-Scholes equations empowered innovative traders to produce on the spot trading of options to better hedge or speculate. With the relative youth of on-line markets, it is the most fertile ground for developing new business models with network mathematics organizational principles in mind.

World of Warcraft (WoW) is one of the largest and fastest growing Mass-Multiplayer Online Role Playing Games (MMORPG) with over 7 million users spread across more than 200 different servers. This is due mostly to the revolutionary features that Blizzard Entertainment, Inc. continues to incorporate into the gaming world. With the release of the expansion less than two months ago, people all around the world are continuing to level and build their characters to progress through game content and compete in player versus player events. In the past day, Blizzard continues to impress players by implementing the Beta version of the online website “The Armory.”

This new feature, “The Armory,” provides a constantly updated profile of each character in the World of Warcraft, listing the user’s character statistics, player versus player statistics, plus much more. There has been a similar independent feature, “CTProfiles”, which allowed users to share their character information, but nothing as convenient as this. “The Armory” sorts players via their username, guild, arena team, and server. This will strengthen the World of Warcraft network in many ways, making guild recruitment, viewing arena team ratings, and sharing character information easier to do. There are already features such as forums that allow out-of-game contact between players, but “The Armory” helps enhance this. This website has even more potential than has been exposed, and it is expected of Blizzard to continue to connect and accommodate their players the best they can.

http://armory.worldofwarcraft.com/#index.xml