Ben Taussig

INFO 2040/CS 2850

Homework 7
Due 11/10/17

(1)
(a)
The equilibrium fractions will be given by evaluating r(x)f(z) = 6 when x = z.
For r(x) = 1 - x and f(z) = 25z, there are equilibrium fractions of the population
purchasing the good when z is equal to 0, .4, and .6
(b) The equilibria at 0 and .6 are stable. The equilibrium at .4 is not. At z < .4, r(z)f(z)
is less than 6 and so there is downward pressure on the consumption of the good, driving a
smaller number of consumers to purchase the good and pushing z toward 0. For .4 < z < .6,
there is upward pressure on the consumption of the good, and a greater number of consumers
are driven to purchase it, driving z toward .6. For z > .6, there is again downward pressure on
the consumption of the good, driving z toward .6.

(2)
(a)
Solving r(x)f(z) = 3/8 when x = z gives z = .5 and .25.
As such, there are equilibria at z = 0, .25, and .5.
(b)
The equilibrium at 0 and .5 are stable. The other at .25 is unstable. At z < .25,
r(z)f(z) is less than 3/8, and so there is downward pressure on the consumption of the good
a smaller number of consumers are inclined to purchase the good, driving z toward 0. For .25 >
z > .5, there is upward pressure on the consumption of the good, and so a lager number of
consumers are inclined to purchase it, driving z toward .5. For z > .5, there is downward
pressure on the consumption of the good, and so a smaller number of consumers are inclined to
purchase it, again driving z toward .5.
(c)
1/16 = .0625. This value is less than .25, and so, as explained in part (b), there is
upward pressure on the consumption of the good. As such, I expect this good to become more
popular over time until the fraction of the population using the good reaches the stable
equilibrium value of .25.
(d)
3/8 = .375. This value is greater than .25 and less than .5. As explained in part
(b), there will thus be downward pressure on the consumption of the good. As such, I expect this
good to become less popular over time until the fraction of the population using the good
reaches the stable equilibrium value of .25.

(3)
(a)
The XYZ companys service has some price p*. This service has a positive
network effect that can be expressed as a function f(z). Additionally, the companys potential
customers have a distribution of reservation prices for this service that can be expressed as a
function r(x). It seems likely that evaluating f(z)r(z) = p* gives a stable equilibrium at z = .7 and
an unstable equilibrium at some value between .4 and .5. In the past, when the ratio of actual to
potential users dropped to values as low as .5, there had been upward pressure on the
consumption of the good, driving this ratio back to .7. However, when the ratio of actual to
potential users dropped below this lower equilibrium value, there was instead downward
pressure on the consumption of the good and this rebound effect was not observed.
(b)
I suggest that the company lower the price (p*) of the service to a value such that
that evaluating f(z)r(z) = p* gives a lower equilibrium value that is below the current ratio of
actual to potential users. If this is done, there should again be upward pressure on the
consumption of the good, and this ratio should return to higher values.

(4)
(a)
The number of videos with k views is equal to a/k^2
For k = 10, evaluating 1600 = a/(10)^2 gives a = 160000.
For k = 80, evaluating x = 160000/(80)^2 gives x = 25.
As such, I expect 25 videos to have 80 views.
(b)
The number of videos with k views is equal to b/k^c
With the given information, it can be determined that
i) 1600 = b/(10)^c
ii) 100 = b/20^c
Combining these equations gives 100*(20^c) = 1600*(10^c) = b
This equation is satisfied for c = 4, giving b = 16000000.
As such, I suggest a value of c = 4 for the alternate power law.

(5)
(a)
This graph could not have been produced by the rich-get-richer process
described in Chapter 18. In the process described, each node creates one and only one link to
another node. Node 4 has 2 links out of it. and as such, this graph must have been arranged by
some other process.
(b)
This graph could have been been produced by the rich-get-richer process
described in chapter 18. This process requires that each node (apart from node 1) must point to
either an earlier node, or to a node that is pointed to by an earlier node. Each node in this graph
points to an earlier node, and as such, it can be concluded that this process could have been
used to produce this graph.
(c)
This graph could have been produced by the rich-get richer process described in
chapter 18. Again, each node (except node 1) points to an earlier node, justifying this
conclusion.
(d)
This graph could have been produced by the rich-get-richer process described in
chapter 18. Each node in this graph, apart from nodes 1 and 2, point to earlier nodes. Node 1 is
not required to make any links in this process. Under this process. if p is the probability that
node 2 will randomly link to an earlier node (i.e., node 1), there is a 1-p probability that node 2
will randomly link to a node linked to by an earlier node. The only earlier node is node 1, which
does not have any out-links. As such, if node 2 is chosen to link to a page linked to by node 1,
node 2 will not link to any other pages.