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Social Networks
              Information Cascades and
              Viral Marketing



Saturday, September 8, 12
Which
                            restaurant to
                              choose?
                              conformity




Saturday, September 8, 12
Information cascade
                        making the same decision that the others have
                        made, independently of the own private
                        information signals




Saturday, September 8, 12
Information cascade
                Sequential decision making
                Incomplete information
                The choice of previous participants is known
                (but no the reasons!)
                Limited selection space
                Rational decision making
                A posteriori probability (Bayes’ theorem)




Saturday, September 8, 12
Information spread

                  Medium:
                          network structure
                  Model:
                       distribution mechanism




Saturday, September 8, 12
Universal structure of
           social networks
             Power low degree distribution
             Gigantic connected component
             Small world phenomenon
             Large clustering coefficient
             Hierarchical structure




Saturday, September 8, 12
Diffusion model
                method - diffusion
                virus model
                “infected” on contact
                probability depends on
                immunity
                 can model
                     news
                     gossips



Saturday, September 8, 12
Diffusion model
           Step 1




Saturday, September 8, 12
Diffusion model
           Step 2




Saturday, September 8, 12
Diffusion model
           Step 3




Saturday, September 8, 12
Diffusion model
           Step 4




Saturday, September 8, 12
Diffusion model
           Step 5

                             Complete coverage
                             Process time depends
                             on the source
                             Based on connectivity
                             pattern




Saturday, September 8, 12
Threshold model
                neighbors “opinion”
                decision threshold
                information cascade
                can model
                     beliefs propagation     A,B - types of behavior
                     purchasing decisions    q –decision threshold
                     spread of innovations   If fraction of neighbors with A
                                             greater than q, accpet A




Saturday, September 8, 12
Threshold model
                threshold= 1/2




Saturday, September 8, 12
Threshold model
           Step 1
                             2 sources
                             threshold= 2/5




Saturday, September 8, 12
Threshold model
           Step 2




Saturday, September 8, 12
Threshold model
           Step 3




Saturday, September 8, 12
Threshold model
           Step 4
                             incomplete cascade
                             depends on network
                             topology
                             strongly depends on
                             source selection




Saturday, September 8, 12
Complete cascades
                     Strategic source placement
                     Well connected
                     Inside various communities




                Increase of competitive advantage
                     reduce threshold level




Saturday, September 8, 12
“The Dynamics of Viral
                                     Product recommendation network
                 Marketing”
           J. Leskovec et al, 2007
                                                 (DVDs)

Saturday, September 8, 12
#newsjp




              Twitter
                      retweet                                          #ocra


                      mention



           “Truthy” Project. Center for Complex Networks and System
                          Research. Indiana University.

                                                                       #iraq


Saturday, September 8, 12
Saturday, September 8, 12

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Information cascades

  • 1. Social Networks Information Cascades and Viral Marketing Saturday, September 8, 12
  • 2. Which restaurant to choose? conformity Saturday, September 8, 12
  • 3. Information cascade making the same decision that the others have made, independently of the own private information signals Saturday, September 8, 12
  • 4. Information cascade Sequential decision making Incomplete information The choice of previous participants is known (but no the reasons!) Limited selection space Rational decision making A posteriori probability (Bayes’ theorem) Saturday, September 8, 12
  • 5. Information spread Medium: network structure Model: distribution mechanism Saturday, September 8, 12
  • 6. Universal structure of social networks Power low degree distribution Gigantic connected component Small world phenomenon Large clustering coefficient Hierarchical structure Saturday, September 8, 12
  • 7. Diffusion model method - diffusion virus model “infected” on contact probability depends on immunity  can model news gossips Saturday, September 8, 12
  • 8. Diffusion model Step 1 Saturday, September 8, 12
  • 9. Diffusion model Step 2 Saturday, September 8, 12
  • 10. Diffusion model Step 3 Saturday, September 8, 12
  • 11. Diffusion model Step 4 Saturday, September 8, 12
  • 12. Diffusion model Step 5 Complete coverage Process time depends on the source Based on connectivity pattern Saturday, September 8, 12
  • 13. Threshold model neighbors “opinion” decision threshold information cascade can model beliefs propagation A,B - types of behavior purchasing decisions q –decision threshold spread of innovations If fraction of neighbors with A greater than q, accpet A Saturday, September 8, 12
  • 14. Threshold model threshold= 1/2 Saturday, September 8, 12
  • 15. Threshold model Step 1 2 sources threshold= 2/5 Saturday, September 8, 12
  • 16. Threshold model Step 2 Saturday, September 8, 12
  • 17. Threshold model Step 3 Saturday, September 8, 12
  • 18. Threshold model Step 4 incomplete cascade depends on network topology strongly depends on source selection Saturday, September 8, 12
  • 19. Complete cascades Strategic source placement Well connected Inside various communities Increase of competitive advantage reduce threshold level Saturday, September 8, 12
  • 20. “The Dynamics of Viral Product recommendation network Marketing” J. Leskovec et al, 2007 (DVDs) Saturday, September 8, 12
  • 21. #newsjp Twitter retweet #ocra mention “Truthy” Project. Center for Complex Networks and System Research. Indiana University. #iraq Saturday, September 8, 12