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Social and Economic
Network Analysis
UNIT – IV
CASCADING BEHAVIOUR IN NETWORKS
1
Overview
Probabilistic Models
Decision Based
Models
VANI KANDHASAMY, PSGTECH
2
Summary
VANI KANDHASAMY, PSGTECH
3
Probabilistic Model
NETWORKS, CROWDS AND MARKETS - CHAPTER 21
VANI KANDHASAMY, PSGTECH
4
Epidemics
â–ȘEpidemics spread is determined by properties of the
pathogen carrying it & also by contact network
â–ȘModeling the contact network is crucial to understand the
spread of an epidemics
â–ȘProbabilistic models for epidemics – random
â–ȘDiffusion of Ideas and Behaviors (Influence) in social
network
VANI KANDHASAMY, PSGTECH
5
Contagion model based on random trees
â–ȘA patient meets d new people
â–ȘWith probability q > 0 patient infects each of them
â–ȘHow to determine whether the disease will spread
or dies out?
â–ȘAns: R0 - Basic reproductive number
Expected # of people that get infected = d . q
â–ȘOnly R0 matters:
R0 ≄ 1: epidemic never dies and the number of infected people increases exponentially
R0 <1 : Epidemic dies out exponentially quickly
VANI KANDHASAMY, PSGTECH
6
Contagion model based on random trees
â–ȘWhen R0 is close 1, slightly changing d or q can result in epidemics
dying out or happening
â–ȘQuarantining people/nodes [reducing d]
â–ȘEncouraging better sanitary practices reduces germs spreading
[reducing q]
oMeasles has an R0 between 12 and 18
oEbola has an R0 between 1.5 and 2
oCovid-19 has an R0 between 1.4 and 3.9
â–ȘVery simplified model of disease spread
VANI KANDHASAMY, PSGTECH
7
Social contagion - Flickr
â–ȘUsers can be exposed to a photo via social influence or external links
â–Ș Did a particular like spread through social links?
â–ȘNo, if a user likes a photo and if none of his friends have previously liked the
photo
â–ȘYes, if a user likes a photo after at least one of her friends liked the photo -
Social cascade
R0 of popular photo is
between 1 and 190
VANI KANDHASAMY, PSGTECH
8
SIR Epidemic model
â–ȘVirus Propagation: 2 Parameters:
â–Ș(Virus) Birth rate ÎČ:
probability that an infected neighbor attacks
probability of contagion
â–Ș(Virus) Death rate ÎŽ:
Probability that an infected node heals
Length of infection
VANI KANDHASAMY, PSGTECH
9
Assume nodes y and z are initially
infected & length of infection (t) = 1
VANI KANDHASAMY, PSGTECH
10
SIS Epidemic model
Virus “strength”: s = ÎČ /ÎŽ
VANI KANDHASAMY, PSGTECH
11
SIS Epidemic model
Assume node v is initially infected &
length of infection (t) = 1
VANI KANDHASAMY, PSGTECH
12
Rumor spread modelling - Twitter
VANI KANDHASAMY, PSGTECH
13
Decision Based Model
NETWORKS, CROWDS AND MARKETS - CHAPTER 6 & 19
VANI KANDHASAMY, PSGTECH
14
Game Theory
â–ȘGraph Theory – study of network structure
â–ȘGame Theory – study of behaviors
â–ȘOutcome of a persons decision depends not just on how they choose options
but also on choices made by their friends
VANI KANDHASAMY, PSGTECH
Product pricing Choosing Route Auction bidding
15
What is a Game?
â–ȘA game is a formal representation of the strategic interaction
between the multiple agents that are called players
â–ȘPrisoner’s Dilemma:
oPrisoners 1 and 2 are caught for a crime and are interrogated in separate
chambers
oInterrogating officer explains the rules
‱ if both confesses the crime - both get 4 years of jail
‱ if both denies, some part of the charges still apply - each get 1 years of jail
‱ if one confesses but the other denies, the crime will be proved - confessor goes free, denier gets 10
years of jail
oAvailable choices for the suspecs: Confess (betray) or Not confess (stays silent)
VANI KANDHASAMY, PSGTECH
16
Basic Ingredients of a Game
VANI KANDHASAMY, PSGTECH
Not
Confess
Confess
Not
Confess
Each serves
1 year
S2 is free
S1 got 10
years
Confess S2 got 10
S1 years
is free
Each serves 4
years
Suspect 2
Suspect
1
17
Basic Ingredients of a Game
â–ȘPlayers – set of participants
oBoth the suspects
â–ȘStrategy – set of options
available to the players
oTo confess or not to confess
â–ȘPayoff – the benefits that
each player receives
oReduced sentence/jail term
VANI KANDHASAMY, PSGTECH
Not
Confess
Confess
Not
Confess
Each serves
1 year
S2 is free
S1 got 10
years
Confess S2 got 10
S1 years
is free
Each serves 4
years
Suspect 2
Suspect
1
17
Reasoning about Behavior in a Game
â–ȘHow the Suspect 1 choose his option?
â–ȘIf Suspect 2 were going to confess
oSuspect 1 can also confess and gets payoff (sentence term) of 4 years
oSuspect 1 don’t confess and gets payoff (sentence term) of 10 years
â–ȘIf Suspect 2 were not going to confess
â–ȘSuspect 1 can also don’t confess and gets payoff (sentence term) of 1
year
â–ȘSuspect 1 confess and gets free
VANI KANDHASAMY, PSGTECH
18
Reasoning about Behavior in a Game
â–ȘHow the Suspect 1 choose his option?
â–ȘIf Suspect 2 were going to confess
oSuspect 1 can also confess and gets payoff (sentence term) of 4 years
oSuspect 1 don’t confess and gets payoff (sentence term) of 10 years
â–ȘIf Suspect 2 were not going to confess
â–ȘSuspect 1 can also don’t confess and gets payoff (sentence term) of 1
year
â–ȘSuspect 1 confess and gets free
VANI KANDHASAMY, PSGTECH
Confessing is best strategy in both the cases
18
Reasoning about Behavior in a Game
VANI KANDHASAMY, PSGTECH
Arms Races – competitors use
dangerous option to remain
evenly matched
19
Best responses
â–ȘBest response - best choice of one player in response to each possible
choice of his or her opponent
â–ȘStrategy S for Player 1 is a best response to a strategy T for Player 2, if S
produces at least as good a payoff as any other strategies S’ of Player 1
paired with T
â–ȘStrategy S of Player 1 is a strict best response to a strategy T for Player 2,
if S produces a strictly higher payoff than all other strategies S’ of Player 1
paired with T
VANI KANDHASAMY, PSGTECH
20
Dominant strategy
â–ȘA dominant strategy for Player 1 is a strategy that is a best response
to every strategy of Player 2
â–ȘA strictly dominant strategy for Player 1 is a strategy that is a strict
best response to every strategy of Player 2
VANI KANDHASAMY, PSGTECH
21
Only one player has Strictly Dominant
Strategy
VANI KANDHASAMY, PSGTECH
â–Ș60% of people prefer low priced product & 40% prefer upscaled
product
â–ȘFirm 1 is popular and gets 80% of the sales & Firm 2 gets only 20%
22
Only one player has Strictly Dominant
Strategy
VANI KANDHASAMY, PSGTECH
â–Ș60% of people prefer low priced product & 40% prefer upscaled
product
â–ȘFirm 1 is popular and gets 80% of the sales & Firm 2 gets only 20%
Firm 1 has strictly
dominant strategy:
Low priced is a strict
best response to both
strategies of Firm 2
22
Only one player has Strictly Dominant
Strategy
VANI KANDHASAMY, PSGTECH
â–Ș60% of people prefer low priced product & 40% prefer upscaled
product
â–ȘFirm 1 is popular and gets 80% of the sales & Firm 2 gets only 20%
Firm 1 has strictly
dominant strategy:
Low priced is a strict
best response to both
strategies of Firm 2
Firm 2 doesn’t have
dominant strategy:
Low priced is a best
response when Firm 1
plays upscale & vice
versa
22
No player has Strictly Dominant Strategy
Three client game
â–ȘTwo firms each hope to do business with one of three large clients A, B, and C
â–ȘA is a larger client, doing business with A is worth 8 and worth of B or C is 2
â–ȘA will only do business with the firms if both approach A
â–ȘFirm 1 is too small to attract business on its own
VANI KANDHASAMY, PSGTECH
23
No player has Strictly Dominant Strategy
Three client game
â–ȘTwo firms each hope to do business with one of three large clients A, B, and C
â–ȘA is a larger client, doing business with A is worth 8 and worth of B or C is 2
â–ȘA will only do business with the firms if both approach A
â–ȘFirm 1 is too small to attract business on its own
VANI KANDHASAMY, PSGTECH
For Firm 1
A is strict best response to A by Firm 2
B is strict best response to B by Firm 2
C is strict best response to C by Firm 2
23
No player has Strictly Dominant Strategy
Three client game
â–ȘTwo firms each hope to do business with one of three large clients A, B, and C
â–ȘA is a larger client, doing business with A is worth 8 and worth of B or C is 2
â–ȘA will only do business with the firms if both approach A
â–ȘFirm 1 is too small to attract business on its own
VANI KANDHASAMY, PSGTECH
For Firm 1
A is strict best response to A by Firm 2
B is strict best response to B by Firm 2
C is strict best response to C by Firm 2
For Firm 2
A is strict best response to A by Firm 1
C is strict best response to B by Firm 1
B is strict best response to C by Firm 1
23
No player has Strictly Dominant Strategy
Three client game
â–ȘTwo firms each hope to do business with one of three large clients A, B, and C
â–ȘA is a larger client, doing business with A is worth 8 and worth of B or C is 2
â–ȘA will only do business with the firms if both approach A
â–ȘFirm 1 is too small to attract business on its own
VANI KANDHASAMY, PSGTECH
For Firm 1
A is strict best response to A by Firm 2
B is strict best response to B by Firm 2
C is strict best response to C by Firm 2
For Firm 2
A is strict best response to A by Firm 1
C is strict best response to B by Firm 1
B is strict best response to C by Firm 1
Neither firm has a dominant strategy:
Each strategy by each firm is a strict
best response to some strategy by
other firm
23
Nash Equilibrium
â–ȘThe pair of strategies (S, T ) is a Nash equilibrium if S is a best response to T, and
T is a best response to S
â–ȘIf the players choose strategies that are best responses to each other, then no
player has an incentive to deviate to an alternative strategy
VANI KANDHASAMY, PSGTECH
24
Multiple Equilibria
Coordination game – the two players’ have shared goal to coordinate
on the same strategy
Stag hunt game
VANI KANDHASAMY, PSGTECH
25
Multiple Equilibria
Coordination game – the two players’ have shared goal to coordinate
on the same strategy
Stag hunt game
VANI KANDHASAMY, PSGTECH
25
Multiple Equilibria
Coordination game – the two players’ have shared goal to coordinate
on the same strategy
Stag hunt game
VANI KANDHASAMY, PSGTECH
If players mis coordinate
then the one who is trying
for the higher-payoff
outcome gets penalized
more
25
Multiple Equilibria
Unbalanced Coordination game – Battle of the sexes
VANI KANDHASAMY, PSGTECH
Romantic
Action
Action
Romantic
26
Multiple Equilibria
Unbalanced Coordination game – Battle of the sexes
VANI KANDHASAMY, PSGTECH
Romantic
Action
Action
Romantic
Follow conventions to
resolve disagreements
when players prefer
different ways to
coordinate
26
Game Theoretic model of Cascades
â–ȘBased on 2 player coordination game
o2 players – each chooses technology A or B (Signal/Telegram)
oEach person can only adopt one “behavior”, A or B
oYou gain more payoff if your friend has adopted the same behavior as you
VANI KANDHASAMY, PSGTECH
27
Game Theoretic model of Cascades
â–ȘBased on 2 player coordination game
o2 players – each chooses technology A or B (Signal/Telegram)
oEach person can only adopt one “behavior”, A or B
oYou gain more payoff if your friend has adopted the same behavior as you
VANI KANDHASAMY, PSGTECH
Direct benefit
effects
27
A Networked Coordination Game
VANI KANDHASAMY, PSGTECH
â–ȘEach node v is playing a copy of the game with each of its neighbors
â–ȘPayoff: sum of node payoffs per game
28
A Networked Coordination Game
VANI KANDHASAMY, PSGTECH
â–ȘEach node v is playing a copy of the game with each of its neighbors
â–ȘPayoff: sum of node payoffs per game
Two equilibria
28
A Networked Coordination Game
â–ȘLet v have d neighbors
â–ȘAssume fraction p of v’s neighbors
adopt A
â–ȘPayoffv = a∙p∙d if v chooses A
= b∙(1-p)∙d if v chooses B
â–ȘA is a better choice if
VANI KANDHASAMY, PSGTECH
p -> fraction of v’s friends with A
q -> payoff threshold
29
A Networked Coordination Game
â–ȘLet v have d neighbors
â–ȘAssume fraction p of v’s neighbors
adopt A
â–ȘPayoffv = a∙p∙d if v chooses A
= b∙(1-p)∙d if v chooses B
â–ȘA is a better choice if
VANI KANDHASAMY, PSGTECH
p -> fraction of v’s friends with A
q -> payoff threshold
v chooses A if: p > q
29
Cascading behavior
VANI KANDHASAMY, PSGTECH
30
Cascading behavior
â–ȘGraph where everyone starts with all B
â–ȘSmall set S of early adopters of A (they keep using A no matter what payoffs tell
them to do)
â–ȘAssume payoffs are set in such a way that nodes say:
â–ȘIf more than q of my friends take A I’ll also take A
â–ȘWhen does all nodes will switch to A?
â–ȘWhat causes the spread of A to stop?
VANI KANDHASAMY, PSGTECH
Network structure, Initial adopters, Threshold - q
30
Cascading behavior – Complete cascade
â–Șv and w as the initial adopters
â–ȘPayoffs a = 3 and b = 2
â–ȘNodes will switch from B to A, if q =
2/5 fraction of their neighbors are
using A
â–ȘStep 1:
or and t switch to A since 2/3 (>2/5) of their
friends are using A
os and u do not switch as only 1/3 (<2/5) of
their friends are using A
â–ȘStep 2:
os and u switch to A since 2/3 (>2/5) of their
friends are using A
VANI KANDHASAMY, PSGTECH
31
Cascading behavior
VANI KANDHASAMY, PSGTECH
Step 1: Step 2-4:
32
Cascading behavior
VANI KANDHASAMY, PSGTECH
Step 1: Step 2-4:
32
Cascading behavior
VANI KANDHASAMY, PSGTECH
Communities
hinder innovation
Step 1: Step 2-4:
32
How to go viral?
THRESHOLD
â–ȘIncreasing quality/payoff of A
from a = 3 to 4
â–ȘLowers the threshold q from 2/5
to 1/3
â–ȘA would break into other parts
of the network
INITIAL ADOPTERS
â–ȘChoosing initial adopters
carefully
â–Ș12 or 13 can be convinced to
switch to A to get cascade going
â–ȘChoose key nodes based on their
network position
VANI KANDHASAMY, PSGTECH
33
Cascading behavior – Lowering
Threshold
VANI KANDHASAMY, PSGTECH
Step 1: Step 2-5:
34
Cascading behavior – Lowering
Threshold
Step 5: Step 6:
VANI KANDHASAMY, PSGTECH
35
Cascading behavior – Lowering
Threshold
Step 6: Step 7:
VANI KANDHASAMY, PSGTECH
36
Cascading behavior – Convincing key
people
Step 2:
VANI KANDHASAMY, PSGTECH
Step 1:
37
Cascading behavior – Convincing key
people
Step 2: Step 3-4:
VANI KANDHASAMY, PSGTECH
38
Cascading behavior – Convincing key
people
Step 4: Step 5-6:
VANI KANDHASAMY, PSGTECH
39
Diffusion models
DECISION BASED MODEL
â–ȘModels of product adoption, decision making
â–ȘUtility based
â–Ș“Node” centric: A node observes decisions of
its neighbors and makes its own decision
â–ȘExample:
Protest recruitment in Twitter, Product adoption
PROBABILISTIC MODEL
â–ȘModels of influence or disease spreading
â–ȘLack of decision making and involves
randomness
â–ȘAn infected node tries to “push” the contagion
to an uninfected node
â–ȘExample:
Rumor detection in Twitter, Power grid failure
VANI KANDHASAMY, PSGTECH
40

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Cascading behavior in the networks

  • 1. Social and Economic Network Analysis UNIT – IV CASCADING BEHAVIOUR IN NETWORKS 1
  • 4. Probabilistic Model NETWORKS, CROWDS AND MARKETS - CHAPTER 21 VANI KANDHASAMY, PSGTECH 4
  • 5. Epidemics â–ȘEpidemics spread is determined by properties of the pathogen carrying it & also by contact network â–ȘModeling the contact network is crucial to understand the spread of an epidemics â–ȘProbabilistic models for epidemics – random â–ȘDiffusion of Ideas and Behaviors (Influence) in social network VANI KANDHASAMY, PSGTECH 5
  • 6. Contagion model based on random trees â–ȘA patient meets d new people â–ȘWith probability q > 0 patient infects each of them â–ȘHow to determine whether the disease will spread or dies out? â–ȘAns: R0 - Basic reproductive number Expected # of people that get infected = d . q â–ȘOnly R0 matters: R0 ≄ 1: epidemic never dies and the number of infected people increases exponentially R0 <1 : Epidemic dies out exponentially quickly VANI KANDHASAMY, PSGTECH 6
  • 7. Contagion model based on random trees â–ȘWhen R0 is close 1, slightly changing d or q can result in epidemics dying out or happening â–ȘQuarantining people/nodes [reducing d] â–ȘEncouraging better sanitary practices reduces germs spreading [reducing q] oMeasles has an R0 between 12 and 18 oEbola has an R0 between 1.5 and 2 oCovid-19 has an R0 between 1.4 and 3.9 â–ȘVery simplified model of disease spread VANI KANDHASAMY, PSGTECH 7
  • 8. Social contagion - Flickr â–ȘUsers can be exposed to a photo via social influence or external links â–Ș Did a particular like spread through social links? â–ȘNo, if a user likes a photo and if none of his friends have previously liked the photo â–ȘYes, if a user likes a photo after at least one of her friends liked the photo - Social cascade R0 of popular photo is between 1 and 190 VANI KANDHASAMY, PSGTECH 8
  • 9. SIR Epidemic model â–ȘVirus Propagation: 2 Parameters: â–Ș(Virus) Birth rate ÎČ: probability that an infected neighbor attacks probability of contagion â–Ș(Virus) Death rate ÎŽ: Probability that an infected node heals Length of infection VANI KANDHASAMY, PSGTECH 9
  • 10. Assume nodes y and z are initially infected & length of infection (t) = 1 VANI KANDHASAMY, PSGTECH 10
  • 11. SIS Epidemic model Virus “strength”: s = ÎČ /ÎŽ VANI KANDHASAMY, PSGTECH 11
  • 12. SIS Epidemic model Assume node v is initially infected & length of infection (t) = 1 VANI KANDHASAMY, PSGTECH 12
  • 13. Rumor spread modelling - Twitter VANI KANDHASAMY, PSGTECH 13
  • 14. Decision Based Model NETWORKS, CROWDS AND MARKETS - CHAPTER 6 & 19 VANI KANDHASAMY, PSGTECH 14
  • 15. Game Theory â–ȘGraph Theory – study of network structure â–ȘGame Theory – study of behaviors â–ȘOutcome of a persons decision depends not just on how they choose options but also on choices made by their friends VANI KANDHASAMY, PSGTECH Product pricing Choosing Route Auction bidding 15
  • 16. What is a Game? â–ȘA game is a formal representation of the strategic interaction between the multiple agents that are called players â–ȘPrisoner’s Dilemma: oPrisoners 1 and 2 are caught for a crime and are interrogated in separate chambers oInterrogating officer explains the rules ‱ if both confesses the crime - both get 4 years of jail ‱ if both denies, some part of the charges still apply - each get 1 years of jail ‱ if one confesses but the other denies, the crime will be proved - confessor goes free, denier gets 10 years of jail oAvailable choices for the suspecs: Confess (betray) or Not confess (stays silent) VANI KANDHASAMY, PSGTECH 16
  • 17. Basic Ingredients of a Game VANI KANDHASAMY, PSGTECH Not Confess Confess Not Confess Each serves 1 year S2 is free S1 got 10 years Confess S2 got 10 S1 years is free Each serves 4 years Suspect 2 Suspect 1 17
  • 18. Basic Ingredients of a Game â–ȘPlayers – set of participants oBoth the suspects â–ȘStrategy – set of options available to the players oTo confess or not to confess â–ȘPayoff – the benefits that each player receives oReduced sentence/jail term VANI KANDHASAMY, PSGTECH Not Confess Confess Not Confess Each serves 1 year S2 is free S1 got 10 years Confess S2 got 10 S1 years is free Each serves 4 years Suspect 2 Suspect 1 17
  • 19. Reasoning about Behavior in a Game â–ȘHow the Suspect 1 choose his option? â–ȘIf Suspect 2 were going to confess oSuspect 1 can also confess and gets payoff (sentence term) of 4 years oSuspect 1 don’t confess and gets payoff (sentence term) of 10 years â–ȘIf Suspect 2 were not going to confess â–ȘSuspect 1 can also don’t confess and gets payoff (sentence term) of 1 year â–ȘSuspect 1 confess and gets free VANI KANDHASAMY, PSGTECH 18
  • 20. Reasoning about Behavior in a Game â–ȘHow the Suspect 1 choose his option? â–ȘIf Suspect 2 were going to confess oSuspect 1 can also confess and gets payoff (sentence term) of 4 years oSuspect 1 don’t confess and gets payoff (sentence term) of 10 years â–ȘIf Suspect 2 were not going to confess â–ȘSuspect 1 can also don’t confess and gets payoff (sentence term) of 1 year â–ȘSuspect 1 confess and gets free VANI KANDHASAMY, PSGTECH Confessing is best strategy in both the cases 18
  • 21. Reasoning about Behavior in a Game VANI KANDHASAMY, PSGTECH Arms Races – competitors use dangerous option to remain evenly matched 19
  • 22. Best responses â–ȘBest response - best choice of one player in response to each possible choice of his or her opponent â–ȘStrategy S for Player 1 is a best response to a strategy T for Player 2, if S produces at least as good a payoff as any other strategies S’ of Player 1 paired with T â–ȘStrategy S of Player 1 is a strict best response to a strategy T for Player 2, if S produces a strictly higher payoff than all other strategies S’ of Player 1 paired with T VANI KANDHASAMY, PSGTECH 20
  • 23. Dominant strategy â–ȘA dominant strategy for Player 1 is a strategy that is a best response to every strategy of Player 2 â–ȘA strictly dominant strategy for Player 1 is a strategy that is a strict best response to every strategy of Player 2 VANI KANDHASAMY, PSGTECH 21
  • 24. Only one player has Strictly Dominant Strategy VANI KANDHASAMY, PSGTECH â–Ș60% of people prefer low priced product & 40% prefer upscaled product â–ȘFirm 1 is popular and gets 80% of the sales & Firm 2 gets only 20% 22
  • 25. Only one player has Strictly Dominant Strategy VANI KANDHASAMY, PSGTECH â–Ș60% of people prefer low priced product & 40% prefer upscaled product â–ȘFirm 1 is popular and gets 80% of the sales & Firm 2 gets only 20% Firm 1 has strictly dominant strategy: Low priced is a strict best response to both strategies of Firm 2 22
  • 26. Only one player has Strictly Dominant Strategy VANI KANDHASAMY, PSGTECH â–Ș60% of people prefer low priced product & 40% prefer upscaled product â–ȘFirm 1 is popular and gets 80% of the sales & Firm 2 gets only 20% Firm 1 has strictly dominant strategy: Low priced is a strict best response to both strategies of Firm 2 Firm 2 doesn’t have dominant strategy: Low priced is a best response when Firm 1 plays upscale & vice versa 22
  • 27. No player has Strictly Dominant Strategy Three client game â–ȘTwo firms each hope to do business with one of three large clients A, B, and C â–ȘA is a larger client, doing business with A is worth 8 and worth of B or C is 2 â–ȘA will only do business with the firms if both approach A â–ȘFirm 1 is too small to attract business on its own VANI KANDHASAMY, PSGTECH 23
  • 28. No player has Strictly Dominant Strategy Three client game â–ȘTwo firms each hope to do business with one of three large clients A, B, and C â–ȘA is a larger client, doing business with A is worth 8 and worth of B or C is 2 â–ȘA will only do business with the firms if both approach A â–ȘFirm 1 is too small to attract business on its own VANI KANDHASAMY, PSGTECH For Firm 1 A is strict best response to A by Firm 2 B is strict best response to B by Firm 2 C is strict best response to C by Firm 2 23
  • 29. No player has Strictly Dominant Strategy Three client game â–ȘTwo firms each hope to do business with one of three large clients A, B, and C â–ȘA is a larger client, doing business with A is worth 8 and worth of B or C is 2 â–ȘA will only do business with the firms if both approach A â–ȘFirm 1 is too small to attract business on its own VANI KANDHASAMY, PSGTECH For Firm 1 A is strict best response to A by Firm 2 B is strict best response to B by Firm 2 C is strict best response to C by Firm 2 For Firm 2 A is strict best response to A by Firm 1 C is strict best response to B by Firm 1 B is strict best response to C by Firm 1 23
  • 30. No player has Strictly Dominant Strategy Three client game â–ȘTwo firms each hope to do business with one of three large clients A, B, and C â–ȘA is a larger client, doing business with A is worth 8 and worth of B or C is 2 â–ȘA will only do business with the firms if both approach A â–ȘFirm 1 is too small to attract business on its own VANI KANDHASAMY, PSGTECH For Firm 1 A is strict best response to A by Firm 2 B is strict best response to B by Firm 2 C is strict best response to C by Firm 2 For Firm 2 A is strict best response to A by Firm 1 C is strict best response to B by Firm 1 B is strict best response to C by Firm 1 Neither firm has a dominant strategy: Each strategy by each firm is a strict best response to some strategy by other firm 23
  • 31. Nash Equilibrium â–ȘThe pair of strategies (S, T ) is a Nash equilibrium if S is a best response to T, and T is a best response to S â–ȘIf the players choose strategies that are best responses to each other, then no player has an incentive to deviate to an alternative strategy VANI KANDHASAMY, PSGTECH 24
  • 32. Multiple Equilibria Coordination game – the two players’ have shared goal to coordinate on the same strategy Stag hunt game VANI KANDHASAMY, PSGTECH 25
  • 33. Multiple Equilibria Coordination game – the two players’ have shared goal to coordinate on the same strategy Stag hunt game VANI KANDHASAMY, PSGTECH 25
  • 34. Multiple Equilibria Coordination game – the two players’ have shared goal to coordinate on the same strategy Stag hunt game VANI KANDHASAMY, PSGTECH If players mis coordinate then the one who is trying for the higher-payoff outcome gets penalized more 25
  • 35. Multiple Equilibria Unbalanced Coordination game – Battle of the sexes VANI KANDHASAMY, PSGTECH Romantic Action Action Romantic 26
  • 36. Multiple Equilibria Unbalanced Coordination game – Battle of the sexes VANI KANDHASAMY, PSGTECH Romantic Action Action Romantic Follow conventions to resolve disagreements when players prefer different ways to coordinate 26
  • 37. Game Theoretic model of Cascades â–ȘBased on 2 player coordination game o2 players – each chooses technology A or B (Signal/Telegram) oEach person can only adopt one “behavior”, A or B oYou gain more payoff if your friend has adopted the same behavior as you VANI KANDHASAMY, PSGTECH 27
  • 38. Game Theoretic model of Cascades â–ȘBased on 2 player coordination game o2 players – each chooses technology A or B (Signal/Telegram) oEach person can only adopt one “behavior”, A or B oYou gain more payoff if your friend has adopted the same behavior as you VANI KANDHASAMY, PSGTECH Direct benefit effects 27
  • 39. A Networked Coordination Game VANI KANDHASAMY, PSGTECH â–ȘEach node v is playing a copy of the game with each of its neighbors â–ȘPayoff: sum of node payoffs per game 28
  • 40. A Networked Coordination Game VANI KANDHASAMY, PSGTECH â–ȘEach node v is playing a copy of the game with each of its neighbors â–ȘPayoff: sum of node payoffs per game Two equilibria 28
  • 41. A Networked Coordination Game â–ȘLet v have d neighbors â–ȘAssume fraction p of v’s neighbors adopt A â–ȘPayoffv = a∙p∙d if v chooses A = b∙(1-p)∙d if v chooses B â–ȘA is a better choice if VANI KANDHASAMY, PSGTECH p -> fraction of v’s friends with A q -> payoff threshold 29
  • 42. A Networked Coordination Game â–ȘLet v have d neighbors â–ȘAssume fraction p of v’s neighbors adopt A â–ȘPayoffv = a∙p∙d if v chooses A = b∙(1-p)∙d if v chooses B â–ȘA is a better choice if VANI KANDHASAMY, PSGTECH p -> fraction of v’s friends with A q -> payoff threshold v chooses A if: p > q 29
  • 44. Cascading behavior â–ȘGraph where everyone starts with all B â–ȘSmall set S of early adopters of A (they keep using A no matter what payoffs tell them to do) â–ȘAssume payoffs are set in such a way that nodes say: â–ȘIf more than q of my friends take A I’ll also take A â–ȘWhen does all nodes will switch to A? â–ȘWhat causes the spread of A to stop? VANI KANDHASAMY, PSGTECH Network structure, Initial adopters, Threshold - q 30
  • 45. Cascading behavior – Complete cascade â–Șv and w as the initial adopters â–ȘPayoffs a = 3 and b = 2 â–ȘNodes will switch from B to A, if q = 2/5 fraction of their neighbors are using A â–ȘStep 1: or and t switch to A since 2/3 (>2/5) of their friends are using A os and u do not switch as only 1/3 (<2/5) of their friends are using A â–ȘStep 2: os and u switch to A since 2/3 (>2/5) of their friends are using A VANI KANDHASAMY, PSGTECH 31
  • 46. Cascading behavior VANI KANDHASAMY, PSGTECH Step 1: Step 2-4: 32
  • 47. Cascading behavior VANI KANDHASAMY, PSGTECH Step 1: Step 2-4: 32
  • 48. Cascading behavior VANI KANDHASAMY, PSGTECH Communities hinder innovation Step 1: Step 2-4: 32
  • 49. How to go viral? THRESHOLD â–ȘIncreasing quality/payoff of A from a = 3 to 4 â–ȘLowers the threshold q from 2/5 to 1/3 â–ȘA would break into other parts of the network INITIAL ADOPTERS â–ȘChoosing initial adopters carefully â–Ș12 or 13 can be convinced to switch to A to get cascade going â–ȘChoose key nodes based on their network position VANI KANDHASAMY, PSGTECH 33
  • 50. Cascading behavior – Lowering Threshold VANI KANDHASAMY, PSGTECH Step 1: Step 2-5: 34
  • 51. Cascading behavior – Lowering Threshold Step 5: Step 6: VANI KANDHASAMY, PSGTECH 35
  • 52. Cascading behavior – Lowering Threshold Step 6: Step 7: VANI KANDHASAMY, PSGTECH 36
  • 53. Cascading behavior – Convincing key people Step 2: VANI KANDHASAMY, PSGTECH Step 1: 37
  • 54. Cascading behavior – Convincing key people Step 2: Step 3-4: VANI KANDHASAMY, PSGTECH 38
  • 55. Cascading behavior – Convincing key people Step 4: Step 5-6: VANI KANDHASAMY, PSGTECH 39
  • 56. Diffusion models DECISION BASED MODEL â–ȘModels of product adoption, decision making â–ȘUtility based â–Ș“Node” centric: A node observes decisions of its neighbors and makes its own decision â–ȘExample: Protest recruitment in Twitter, Product adoption PROBABILISTIC MODEL â–ȘModels of influence or disease spreading â–ȘLack of decision making and involves randomness â–ȘAn infected node tries to “push” the contagion to an uninfected node â–ȘExample: Rumor detection in Twitter, Power grid failure VANI KANDHASAMY, PSGTECH 40