Social Networks 101 P ROF. J ASON H ARTLINE AND P ROF. N ICOLE I MMORLICA.

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Social Networks 101 P ROF. J ASON H ARTLINE AND P ROF. N ICOLE I MMORLICA

Announcement Lecture is in L211 this Friday (4/17), not Pancoe!

Guessing game Experiment: There are three balls in this urn, either or

Guessing game Experiment: This is called a blue urn. This is called a yellow urn.

Guessing game Experiment: When I call your name, 1. You (and only you) will see a random ball. 2. You must then guess if the urn is a blue urn or a yellow urn, and tell the class your guess. If you guess correctly, you will earn one point.

What should the 1 st student do? ? ?? Guess that urn is same color as ball.

What should the 2 nd student do? ? ?? 1 st guess was blue.

What should the 2 nd student do? ? ?? 1 st guess was blue. Guess that urn is same color as ball.

What should the 3 rd student do? ? ?? 1 st and 2 nd guesses were blue. Guess that urn is blue no matter what she sees!

What should the n th student do? ? ?? First (n-1) guesses were blue. First 2 students told the truth.

If the first two guesses are blue, everyone should guess blue.

Lecture Eight: Information cascades

Staring up at the sky. Choosing a restaurant in a strange town. Self-reinforcing success of best-selling books. Voting for popular candidates.

Information cascades When: 1. People make decisions sequentially, 2. and observe actions of earlier people. Information cascade: People abandon own info. in favor of inferences based on others actions.

ImitationCascade Rational (not simply peer pressure)

Observations 1.Cascades are easy to start. (every student makes same guess so long as first two students make same guess)

Observations 2. Cascades can lead to bad outcomes. (given blue urn, chance of seeing red ball is 1/3, so first two students guess red with prob. (1/3) 2 = 1/9)

Observations 3. Cascades are fragile. (if a few students show the color of the ball they picked to the entire class, the cascade can be reversed)

Conditional probability How likely is it that the urn is yellow given what youve seen and heard?

Time for

Strategy for urns A player should guess yellow if, Pr [ yellow urn | what she saw and heard ] > ½ and blue otherwise.

Analysis From setup of experiment, Pr [ ] = 1/2

Analysis From composition of urns, Pr [ | ] = 2/3

Analysis Suppose first student draws : Pr [ | ] = Pr [ | ] x Pr [ ] Pr [ ]

Analysis Suppose first student draws : Pr [ | ] = x Pr [ ] Pr [ ] Pr [ ] = Pr [ | ] (2/3) x (1/2) Pr [ | ] xPr [ ] Pr [ | ] xPr [ ] + (2/3) x(1/2) (1/3) x(1/2)= (1/2)

Analysis Suppose first student draws : then he should guess yellow. Pr [ | ] = (2/3) > (1/2)

Analysis Suppose second student draws too: Pr [ |, ] 1 st students guess 2 nd students draw

Analysis Suppose second student draws too: by a similar analysis, so she also guesses yellow. Pr [ |, ] > (1/2)

Analysis Suppose third student draws : Pr [ |,, ] 1 st students guess 2 nd students guess 3 rd students draw

Analysis Suppose third student draws : Pr [ |,, ] = Pr [,, | ] x Pr [ ] Pr [,, ] (1/3) x(2/3) x(2/3)(1/2)

Analysis Pr [,, | ] x Pr [ ] Pr [,, ] = Pr [,, | ] x Pr [ ] + (1/3) x(2/3) x(2/3)(1/2) (2/3) x(1/3) x(1/3)(1/2)

Analysis Suppose third student draws : Pr [ |,, ] = (1/3) x(2/3) x(2/3)x (1/2) (1/3) x(2/3) x(2/3)x (1/2) + (2/3) x(1/3) x(1/3)x (1/2) = (2/3) > (1/2)

Analysis The best strategy for the third student is to guess yellow no matter what he draws.

Other sequences # yellow guesses - # blue guesses Blue cascade starts. Yellow cascade starts student

Announcement Lecture is in L211 this Friday (4/17), not Pancoe!

Next time TBA