The course examines how the computing, economic and sociological worlds are connected and how these connections affects these worlds. Tools from game theory and graph theory are introduced and then used to analyze network structures present in everyday life, with a focus on various types of markets. Topics covered include social networks, web search, auctions, matching markets, and voting.
Instructor: Rafael Pass
Lecture times & Office Hours
The lectures will be on Mon and Wed from 9am-10.15am; all lectures are posted in the calendar. The zoom link to the lectures is here.
The lectures will be recorded, but your attendance and participation is highly encouraged. There will also be plenty of office hours, both by the TAs and by the instructor.
Instructor: Rafael Mon/Wed 10.15-10.45am (will only discuss material in lectures, not HW).
Rafael's Zoom room.
- TA: Cody Freitag, Tuesday 9am-10am and Friday 11am-12pm (for questions about HW or course material in general) Cody's Zoom room
- TA: Benjamin Chan, 6pm-7pm on Mon (for questions about HW and course materials). Ben's Zoom room
- TA: Cody Freitag: firstname.lastname@example.org
- TA: Benjamin Chan: email@example.com
Basic familiarity with mathematical definitions and proofs. Familiarity with sets, basic probability and basic proof techniques are useful; see Chapters 1,2 and 5 in the following lecture notes: [Pass-Tseng]
You also need to be comfortable with programming.
There will be 4 homeworks. Homeworks needs to be submitted 11:59 pm Eastern Time on the day it is due. Additionally, you have a total of 4 “late-days” that you can use throughout the semester, except on the last HW. HW due dates:
- HW 1: March 3
- HW2: March 31
- HW 3: April 28
- HW 4: May 20 (this is a firm deadline, no "late-days" allowed)
HW 4 will contain a review component that you need to complete individually.
The grade is based on your performance on the homework, with an additional 1% for course participation/quality of solutions.
You are free to collaborate in groups of up to 3 students on the homework (in fact, it is highly encouraged!), but you must turn in your own individually written solution and you must specify the names of your collaborators. Additionally, you may make use of published material, provided that you acknowledge all sources used. Note that it is a violation of this policy to submit a problem solution that you are unable to explain orally to a member of the course staff. Problem sets need to be typed up. For more detailed information on the homework policy, see the guidelines on the front page of the homework.
We will use slack as the main communication channel with the TAs and for questions about the homeworks. The (temporary) link to join is here: SLACK
Required: We will be closely following the material from the book Networks and Markets: Game-theoretic Models and Reasoning (The MIT Press, 2019) (NM below). A free on-line version is available here.
Optional: Supplementary material can also be found in the beautiful book Networks, Crowds and Markets (Cambridge University Press, 2010) by Kleinberg and Easley (KE). A free on-line version of the book is available here.
For additional background on sets, proofs and probability theory, please consult the following lecture notes on discrete mathematics: [Pass-Tseng]
Topics Outline (subject to change)
Introduction [preface in the NM, Chapter 1 in KE]
- Game Theory [Chapter 1 in NM, Chapter 6 in KE]
- Definition of a Game
- Dominanted strategies, and iterated deletion procedures
- Nash Equilibrium
- Best response dynamics.
- Graph Theory [Chapter 2,4 in NM, Chapters 2-4 excl. adv material, 10.1-10.2, 10.6, 13 in KE]
- directed, undirected graphs; paths and connectivity
- connected components; the giant component and the internet
- shortest paths and the small world phenomena
- max-flow, min-cut, edge-disjoint paths
- bipartite graphs, maximum and perfect matching, the Hall Marriage problem
- Games on Networks [Chapters 2,3,4,6 in NM, Chapters 8,19 in KE]
- Best-response dynamics as graph traversal; ordinal potential games
- Coordination games on networks (the iPhone/Andoid game);
- Contagion in networks: what makes a node “influential”
- Traffic Networks; Braess “paradox”
- Markets and Auctions on Networks [Chapter 7,8,9 NM; Chapters 9,10,15 in KE]
- Matching markets, market clearing prices.
- Exchange networks
- Auctions and the Vickery-Clark-Grove (VCG) mechanism
- Auctions in matching markets; VCG and the Generalized Second Price (GSP) Auctions; application to sponsored search.
- Mechanisms with Money Transfers: Voting, Matchings and Web search [Chapters 10,11,12,13,14 in NM]
- Voting, strategy-proofness
- Gibbard’s impossibility results
- Single-peaked preferences and the Median Voter theorem
- The House Allocation problem
- Two-sided Matching, The Stable Marriage problem
- The PageRank and Hubs and Authority Algorithms: using links as “votes”
- Manipulation of search algorithms: search engine optimization
- Information and Belief [Chapters 15,16,17 in NM]
- The “Wisdom” of crowds: The Chernoff Bound
- The “Foolishness” of Crowds: Information Cascades; Information Cascades with costly information gathering
- Kripke’s possible worlds models of knowledge; common knowledge
- The Muddy Children Puzze, Can we Agree to Disagree and the No-Trade Theorem
- Common Knowledge of rationality as a characterization of iterated removal of strictly dominated strategies
- The power of higher-order beliefs: Valuation “Bubbles”
- Markets with Network effects [Chapter 18 in NM]
- Price v.s. Demand in markets without network effects
- Price v.s. Demand in markets with network effects; self-fulfilling equilibria
- Markets with asymmetric information: market crashes (the market for lemons) and signaling models
The syllabus page shows a table-oriented view of the course schedule, and the basics of course grading. You can add any other comments, notes, or thoughts you have about the course structure, course policies or anything else.
To add some comments, click the "Edit" link at the top.