Author: Kaihua Sun

Let’s think about a simple case first. For example, there are four advertisers 1, 2, 3, 4

• Advertiser 1,2,3,4 has a profit of v₁, v₂, v₃, v₄ per click
• Advertiser 1,2,3,4 bid b₁,b₂,b₃,b₄ amount
• Highest bidder gets position 1, second highest position 2, and so on
• Payoff to bidder at position i is then (v_i-b_i+1)x_i, where x_i is the CTR. (CTR is the number of clicks that your ad receives divided by the number of times your ad is shown: clicks ÷ impressions = CTR. For example, if you had 5 clicks and 100 impressions, then your CTR would be 5%.)

After all the advertisers know their positions and bids, they may want to change their positions according to the known information. If the person who gets position 2 want to move up to position 1, he will need to pay a price of b₁+e(e is an extremely small value). But if he wants to move down to position 3. He just needs to pay b₄+e. Because people at position 4 bid b₄.

In conclusion, if a bidder wants to move up to position i, he will need to pay b_i+e. If a bidder wants to maintain or move down to position i, he will bid b_i+1+e. ————————(*). This rule (*) can be expanded to n advertisers.

But how will those advertisers really pay? All of them want to maximize their payoff. Is there any Nash equilibrium points for them. For bidder at position i, it will be a dominant strategy for him to stay at position i if he makes at least as much profit by being in the position i than in any other positions. That is:

            (V_i-b_i+1)x_i >= (V_i-b_j)x_j for j<i ——–(1)

            (V_i-b_i+1)x_i >= (V_i-b_i+1)x_j for j>i ———(2)

Therefore, a set of bids(b_i) that satisfies both (1) and (2) of them will be a Nash equilibrium.

I think this Nash equilibrium in auction is very interesting because it expands the Nash equilibrium to n players(bidders). I think this topic here is closely related to the game theory topic but also expands our thinking.

Links:

http://people.ischool.berkeley.edu/~hal/Courses/StratTech09/Lectures/Auctions/google-auction-preso-nz.nb.pdf

https://www.inmobi.com/blog/2018/10/24/what-is-a-second-price-auction-and-how-does-it-work-video

The Internet of Things(IoT) is a system relying on physical devices which, collecting information and sharing those information through the internet without any human efforts. Thanks to cheaper chips and the great power of internet, billions of physical devices around the world are able to be connected to the internet, as a result, IoT becomes more efficient.

The network constructed by the IoT devices looks like the graphs above, and it has many paths inside the network. Every path starts from the user input data(data sources) and passes the application logic services and gateways(intermediate nodes). Finally, the information in the network reaches the storage and display stage (upper-level nodes). Overall, it is evident that IoT creates a network developed by hardware devices in an effective way. Since it does not require any manual work, it speeds up the transmission of information.

Some of my concerns is whether the fast-speed IoT be a potential threat to the public’s privacy and whether the information in the network is recorded without the public’s permission.  The fact is that sensors in the network will collect some extremely sensitive data such as what you say and do in the private space. However, as many IoT devices cannot be patched effectively, they have become the target of many hackers. The hackers are now able to get private information from the device level, and the users’ information security is put in the weak position.

One of the ways that we express the relationship (of what)is like the graph above. Node B represents the user and Node C represents the IoT device. Node B does not trust Node C since IOT wants to record some parts of data and keeps the privacy. By the theory of structural balance, in order to keep the whole network balanced, we need to find another node A which can be another device, another person to be trusted or another group (decentralized).

At present, people think about combining the blockchain technology with the IoT to increase privacy security. The advantage of blockchain is that the block will be broadcasted to many parties to get the validation of information before adding it to the chain. The third parties works in the same way as node A which I want to find out previously. After the information gets validated, it is safe to go released.

IoT still has a few problems currently, but in the near future, these problems are likely to be solved since the public and the market pay much attention on it. Hopefully, IoT can be integrated into people’s life and can be applied in the business system someday.

References:

https://www.zdnet.com/article/what-is-the-internet-of-things-everything-you-need-to-know-about-the-iot-right-now/

https://datafloq.com/read/securing-internet-of-things-iot-with-blockchain/2228

https://neo4j.com/blog/iot-graphs-business-requirements/ https://innovationatwork.ieee.org/blockchain-iot-security/