IME: 1:30-2:20 pm,  April 3, 2007


SPEAKER: Mohammad Mahdian
         Yahoo! Research

TITLE:  The role of compatibility in the diffusion of technologies
        in social networks

In many settings, competing technologies - for example, operating
systems, instant messenger systems, or document formats - can be seen
adopting a limited amount of compatibility with one another; in other
words, the difficulty in using multiple technologies is balanced
somewhere between the two extremes of impossibility and effortless
interoperability.  There are a range of reasons why this phenomenon
occurs, many of which - based on legal, social, or business
considerations - seem to defy concise mathematical models. Despite
this, we show that the advantages of limited compatibility can arise
in a very simple model of diffusion in social networks, thus offering
a basic explanation for this phenomenon in purely strategic terms.

Our approach builds on work on the diffusion of innovations in the
economics literature, which seeks to model how a new technology A might
spread through a social network of individuals who are currently users
of technology B.  We consider several ways of capturing the
compatibility of A and B, focusing primarily on a model in which users
can choose to adopt A, adopt B, or - at an extra cost - adopt both A
and B.  We characterize how the ability of A to spread depends on both
its quality relative to B, and also this additional cost of adopting
both, and find some surprising non-monotonicity properties in the
dependence on these parameters: in some cases, for one technology to
survive the introduction of another, the cost of adopting both
technologies must be balanced within a narrow, intermediate range.  
We also extend the framework to the case of multiple technologies,
where we find that a simple model captures the phenomenon of two firms
adopting a limited "strategic alliance" to defend against a new, third

The talk is based on a joint paper with Nicole Immorlica, Jon Kleinberg,
and Tom Wexler, upcoming in EC'07.