1. Course Overview and Introduction Networked Life CSE 112 Spring 2005 Prof. Michael Kearns

2. What do the following questions… How does Google find what you want? How do tolerant populations become segregated? How many friends between you and Kevin Bacon? How should you split $20 with a stranger? What can the Internet learn from Paris subway? How is file downloading like a competition? How might we combat spam economically? …have in common?

3. An Emerging Science Examining apparent similarities between many human and technological systems & organizations Importance of network effects in such systems How things are connected matters greatly Structure, asymmetry and heterogeneity Details of interaction matter greatly The metaphor of viral spread Dynamics of economic and strategic interaction Qualitative and quantitative; can be very subtle A revolution of –measurement –theory –breadth of vision

4. Who’s Doing All This? Computer Scientists –Understand and design complex, distributed networks –View “competitive” decentralized systems as economies Social Scientists, Behavioral Psychologists, Economists –Understand human behavior in “simple” settings –Revised views of economic rationality in humans –Theories and measurement of social networks Physicists and Mathematicians –Interest and methods in complex systems –Theories of macroscopic behavior (phase transitions) All parties are interacting and collaborating

5. Course Vision and Mission A network-centric examination of a wide range of social, technological, biological, financial and political systems Examined via the tools and metaphors of: –computer science –economics –psychology and sociology –mathematics –physics Emphasize the common themes Develop a new way of examining the world

6. A Communal Experiment No similar undergraduate course No formal technical prerequisites –greatly aided by recent books –publications in Science, Nature, etc. Extensive web visualizations and demos Extensive participatory in-class social experiments Exercises in data analysis Note: Networked Life is now approved to fulfill the College’s Quantitative Data Analysis Requirement

7. Course Outline

8. The Networked Nature of Society (2 lectures) Networks as a collection of pairwise relations Examples of (un)familiar and important networks –social networks –content networks –technological networks –biological networks –economic networks The distinction between structure and dynamics Models of network formation A network-centric overview of modern society.

9. Contagion, Tipping and Networks (2 lectures) Epidemic as metaphor The three laws of Gladwell: –Law of the Few (connectors in a network) –Stickiness (power of the message) –Power of Context The importance of psychology Perceptions of others Interdependence and tipping Paul Revere, Sesame Street, Broken Windows, the Appeal of Smoking, and Suicide Epidemics Informal case studies from social behavior and pop culture.

10. Introduction to Graph Theory (1 lecture) Networks of vertices and edges Graph properties: –cliques, independent sets, connected components, cuts, spanning trees,… –social interpretations and significance Special graphs: –bipartite, planar, weighted, directed, regular,… Computational issues at a high level Beginning to quantify our ideas about networks.

11. Social Network Theory (3 lectures) Metrics of social importance in a network: –degree, closeness, between-ness, clustering… Local and long-distance connections SNT “universals” –small diameter –clustering –heavy-tailed distributions Models of network formation –random graph models –preferential attachment –affiliation networks Examples from society, technology and fantasy A statistical application of graph theory to human organization.

12. The Web as Network (2 lectures) Empirical web structure and components Web and blog communities Web search: –hubs and authorities –the PageRank algorithm The algorithmic implications of network structure.

13. Emergence of Global from Local (2 lectures) Beyond the dynamics of transmission Context, motivation and influence The madness of crowds: –thresholds and cascades –mathematical models of tipping –the market for lemons –private preferences and global segregation Begin to connect to classical issues of human and societal behavior.

14. An Introduction to Game Theory (2 lectures) Models of economic and strategic interaction Notions of equilibrium –Nash –correlated –cooperative –market –bargaining Multi-player games Evolutionary game theory –mimicking vs. optimizing Network effects Social choice theory Powerful mathematical models of what happens over links in competitive and cooperative settings.

15. Interdependent Security and Networks (1 lecture) Security investment and Tragedies of the Commons Catastrophic events: you can only die once Fire detectors, airline security, Arthur Anderson,… Blending network, behavior and dynamics.

16. Network Economics (2 lectures) Buying and selling on a network Modeling constraints on trading partners Local imbalances of supply and demand Preferential attachment, price variation, and the distribution of wealth The effects of network structure on economic outcomes.

17. Behavioral Economics (2 lectures) What’s broken with economics and game theory? How should you split 20 dollars? Beauty contests and ultimatums Cultural and sociological effects The return of context Guilt, envy and altruism: improving the theory Controlled social psychology experiments examining how “rational” we really are(n’t).

18. Internet Basics (1 lecture) IP addresses Routers Domain Name Servers ISPs Congestion control, load balancing The Web and URLs Security issues, network vulnerability Under the hood of the quintessential modern technological network.

19. Internet Economics (2 lectures) Selfish routing The Price of Anarchy Peer-to-peer as competitive economy Paris Metro Pricing for QoS Economic views of network security The collision of network, economics, algorithms, content, and society.

20. Modern Financial Markets (2 lectures) Stock market networks –correlation of returns Market microstructure –limit and market orders –order books and electronic crossing networks –network, connectivity and data issues Quantitative trading –VWAP trading, market making –limit order power laws Herd behavior in trading Economic theory and financial markets Behavioral economics and finance Impacts of the Internet on financial markets A study of the network that runs the world.

21. Course Mechanics Will make heavy use of course web page: –www.cis.upenn.edu/~mkearns/teaching/NetworkedLifewww.cis.upenn.edu/~mkearns/teaching/NetworkedLife –You will need good Internet access! No technical prerequisites Lectures: –slides provided; emphasis on concepts –frequent demos, visualizations, and in-class experiments –please be on time to lectures! (12PM) No recitations this term Readings: mixture of general audience writings and articles from the scientific literature Three required texts: –“The Tipping Point”, Gladwell –“Six Degrees”, Watts –“Micromotives and Macrobehavior”, Schelling Assignments (1/4 of grade) –data analysis: network construction project –computer/web exercises, short essays, quantitative problems –collaboration is not permitted Participatory social experiments (1/4 of grade) –course social network –behavioral economics experiments Midterm (1/4 of grade) Final exam (1/4 of grade)

22. First Assignment Due next lecture (Th 1/13) –Simple background questionnaire –Last-names exercise