IERG 5330: Network Economics

Instructor: Prof. Jianwei Huang

Department of Information Engineering

Fall 2016

Internet

2

• All pictures from the web. Copyrights belong to original authors.

Wireless Networks

3

Social Network

4

Electricity Network

5

Transportation Network

6

8:30

8:00

10:00

11:00

9:00

4:00

4:00

6:00

5:00

4:00 6:007:00

3:00

5:30

8:00

5:456:00

4:00

2:00

5:00

6:00

4:303:30

6:00

2:30

12:45

11:30

1:00

2:00

6:30 6:30

6:30

5:30

5:30

10:30

9:30

8:00

9:00

5:30

2:00

6:30

7:007:00 9:00 10:00 11:00 1:00 2:00 3:00 4:00 5:00 6:00 7:00 9:00 Noon12:00

1:00 2:00 3:00 5:00

6:00 7:008:007:00 9:00 10:00 11:00Midnight

12:00 12:00 1:00 2:00 3:00 4:00 5:00 6:00 7:00 8:00 9:00 10:00 11:00Noon12:00 1:00 2:00 3:00 5:004:00

MONDAY

SUNDAY

ASIA

AUSTRALIA

NORTHAMERICA

SOUTHAMERICA

AFRICA

ASIAEUROPE

P A C I F I C

O C E A N

P A C I F I C

O C E A N

A T L A N T I C

O C E A N

I N D I A N

O C E A NI N D I A N

O C E A N

Inte

rnat

iona

l Dat

e Li

neM

ON

DAY

SUN

DAY

Midnight12:00

ReginaVictoria

Kelowna

Ketchikan

Fairbanks

Prudhoe Bay

Barrow

Kotzebue

Nome

BethelDillingham

King SalmonKodiak

Cordova

DutchHarbor

Juneau

Bangkok

YangonChiang Mai

Sanya

Ho ChiMinh City

Beijing AomoriAkita

KagoshimaNagasaki

QingdaoJinan

Wuhan

Xi´an

Ulaanbaatar

Tianjin

Shenyang

Hanoi

KotaKinabalu

Cebu

Kunming

Penang

Phuket

Phnom Pehn

MacauGuangzhou

Xiamen

Shanghai

Singapore

Jakarta

Brisbane

Sydney

Auckland

KualaLumpur

Saskatoon

Winnipeg

Edmonton

New York (LaGuardia)

ThunderBay

London

Dubai

ColomboLagos

AccraAbidjan Cotonou

Niamey

Ouagadougou

Sao Tome Island

BissauBamako

Dar es Salaam

Johannesburg

Malabo

Pointe Noire

Nairobi

MauritiusAntananarivo

Mahé Island

Entebbe

Malindi

Kisumu

Lamu

ZanzibarMombasa

Moroni

KilimanjaroBujumbura

Maputo

Luanda

Kinshasa

Lubumbashi

Cape Town

AbuDhabi

Djibouti

AddisAbaba

Khartoum

Bahrain

Calcutta

Bangalore ChennaiKano

Abuja

PortHarcourt

DoualaYaoundé

Libreville

Kuwait City

Amman

Baku

Ashgabat

Moscow

Samara

HelsinkiStockholm

St. Petersburg

Kiev

Riga

Vilnius

KrakowKosice

Tallinn

Istanbul

Zagreb

Split

Tunis

SofiaBelgrade

Thessaloniki

MaltaAlgiers

Doha

Dhaka

MumbaiHyderabad

Karachi

Cochin

Male

Delhi

OshBishkek

Grand Cayman

Medellín

Manaus

MontegoBay

Liberia CartagenaMaracaibo

CuracaoBonaire

Marrakech

Casablanca

SalCape

VerdeDakar

TerceiroHorta

Funchal

Tenerife(North and South)

Porto Santo

Las Palmas

Lanzarote

Rabat

Fuerteventura

Nouakchott

Trondheim

Bangui

N'Djamena

Brazzaville

Conakry

Monrovia

Tripoli

Lilongwe

FreetownLome

Lusaka

Harare

Kigali

Kathmandu

Islamabad

Lahore

Peshawar

Kamloops

Taipei

Kaohsiung

KomatsuPusan

Kitakyushu

TaeguChinju

Cheju

Toyama

Hakodate

Osaka

Seoul

Oita

Vladivostok

Kahului

Mayaguez

Barranquilla

Belo Horizonte

Tortola

Bridgetown

St. Croix

Warsaw

Bucharest

Tirana Tashkent

CairoBorgEl Arab

Almaty

Havana

Kingston

Providenciales

Port AuPrince

Grenada

St. Lucia Fort De FrancePointe A Pitre

Tobago

Buenos Aires

Calgary

Puerto Vallarta

Mexico City

Morelia Manzanillo

Guadalajara

Aguascalientes

San Luis PotosíQueretaro

Los Cabos

TolucaLeón/Guanajuato

Tampico

Ixtapa/Zihuatanejo

Honolulu

LosAngeles

Vancouver

Anchorage

MontrealOttawaMont Tremblant

Quebec City

Toronto

ClevelandNew York

(Newark/Liberty)

Bermuda

Cancún

OaxacaHuatulco

CozumelCiudad delCarmen

Belize City

Mérida

VeracruzPuebla

Villahermosa

GuatemalaCity

SanSalvador

CaracasSan José

PanamaCity

ManaguaTegucigalpa

San Pedro SulaRoatan

Bogotá

Quito

Lima

Nassau

SantoDomingo

Aruba

Santiago

San JuanAguadilla

St. Maarten

St. Thomas

Antigua

Port of Spain

Manchester

EdinburghGlasgow

Oslo

BirminghamBristol London

(Gatwick)

London(Heathrow)

Brussels

DublinBelfast

Shannon

Geneva

Berlin

Hamburg

Copenhagen

Athens

Frankfurt

Zurich

Paris

Madrid Barcelona Rome

Milan

Nagoya

Okayama

HiroshimaFukuoka

Palau

YapChuuk(Truk) Pohnpei

KosraeMajuro

Cairns

Kwajalein

SaipanRota

Hong Kong

GuamManila

Tokyo

SendaiNiigata

Sapporo

Lisbon

Acapulco

MonterreyTorreonDurango

Mazatlán

Saltillo

Houston

Chihuahua

SãoPaulo

Santiago

Cordoba

SantaCruz

Rio deJaneiro

Tel Aviv

Amsterdam

Seattle/Tacoma

PuertoPlata Punta

Cana

HalifaxMoncton

St John's

Montevideo

©

Cologne

Cali

Guayaquil

PACIFIC

OCEAN

PACIFIC

OCEAN

KAUAI

HAWAII

MAUI

MOLOKAI

OAHU

LANAI

2:00Hawaii-Aleutian Standard Time

Honolul u

Lihue

Hoolehua

Lanai

Kailua-Kona

KahuluiKapalua

Hilo

Continental RouteFuture ServiceSeasonal ServiceTime Zone BoundaryContinental/Continental Express/Continental Connection DestinationCooperative Airline Destination

International Routes

route maps

Brest

Strasbourg

Mulhouse

Biarritz

Montpellier

Casablanca

Pau

BratisBaselBern

Catania

Naples

PisaGenoa

Florence

Palermo

Bari

Antwerp

Bilbao Turin

AT L AN T I C

O C E AN

NorthSea

M e d i t e r r a n e a n S e a

Oslo

Stavanger

GothenburgKristiansand

Stockholm

Bergen

Copenhagen

BrusselsLille Cologne

Maastricht

Eindhoven

Hamburg

Berlin

Budapest

Humberside

Venice

Bari

VeronaTrieste

NuremburgStrasbourg

Basel

HanoverDusseldorf

Vienna

Stuttgart

Munich

Geneva

Avignon

LyonTurin

Naples

Valence

Nimes

Santiago deCompostela

Norwich

Teesside

NicePisa

BrindisiLamezia

TermePalermo

Barcelona

Ibiza

BolognaFlorence

Ancona

Genoa

Cagliari

ReggioCalabriaCatania

Toulouse

Palma deMallorca

Mahon

Málaga

Bremen

Luxembourg

Edinburgh

Aberdeen

Leeds/Bradford

Car

London

GuernseyJersey

ExeterSouthampton

Newcastle

Sevilla

Granada Murcia

ValenciaAlicante

Belfast Isle ofMan

BillundShannon

Cork

AngersNantes

Limoges

Rennes

Brest

MarseilleMontpellier

Bordeaux

Bratislava

Rotterdam

OstravaSliac

Ljubljana

Paris PragueKarlovy

d

Rome

Milan

Birmingham

Zurich

Le Mans

PotiersClermont-

Ferrand

Lisbon

Oporto

Faro

Madrid

Asturias

Amsterdam

Frankfurt

Glasgow

Manchester

Dublin

Bristol

BiarritzPau

INTERNATIONAL ROUTE SYSTEM

4:00 5:00 6:00 7:00 8:00

PAC I F I CO C E AN

A T L A N T I CO C E A N

Mayaguez

Havana

Kingston

Providenciales

Port AuPrince

Tortola

BridgetownGrenada

St. LuciaFort De France

Pointe A Pitre

Tobago

St. Croix

Tapachula

La PazReynosa

Matamoros

Poza RicaCampeche

PiedrasNegras

Culiacán

MexicaliTijuana

GuerreroNegro

Hermosillo

CiudadObregón

LosMochis

CiudadJuárez

Puerto VallartaMexico CityMorelia

Manzanillo

GuadalajaraAguascalientes

San Luis Potosí

Queretaro

Los Cabos

TolucaLeón/

Guanajuato

Tampico

Ixtapa/Zihuatanejo

Bermuda

Cancún

OaxacaHuatulco

Cozumel

Ciudad del Carmen

Belize City

Mérida

VeracruzPuebla Villahermosa

GuatemalaCitySan

SalvadorSan

José PanamaCity

Managua

TegucigalpaSan Pedro Sula

Roatan

Nassau

SantoDomingo

Aruba

San Juan

Aguadilla

St. Maarten

St.Thomas

Antigua

Port ofSpain

Acapulco

Monterrey

Torreon

Durango

Mazatlán

Saltillo

HoustonChihuahua

PuertoPlata

PuntaCana

GrandCayman

MontegoBay

Liberia

Curacao

Bonaire

Santiago

ToClevelandTo

New York(Newark/Liberty)

ToNew York

(Newark/Liberty)ToNew York(Newark/Liberty)

ToNew York(LaGuardia)

©

London

MontrealOttawaMont Tremblant

QuebecCity

Toronto

ClevelandNew York(Newark/Liberty)

Halifax

MonctonSt John's

To Houston

5/09

Why Network Economics

• Engineered networks serve as the platform for many our basic economics interactions.

• Economics will affect the adoption and creation of network innovations.

7

Course Objectives• Learn to understand and analyze networking

problems using economics and game theory

• Course is highly mathematically challenging

• Need an open mind for interdisciplinary networking research

• Biased towards my own research background (communication and energy networks)

• Paper presentations and guest lectures will fill in some gaps

8

What We will Cover

• Theory (by me)

• Economics basics: demand and supply

• Social optimal pricing: convex optimization, duality theory

• Monopoly and price discrimination

• Game theory: how selfish nodes interact

• Network externality: congestion and network effect

9

What We will Cover

• Applications (by me, you, and guests)

• Internet

• Wireless networks

• Social networks

• Power networks

• ...

10

Course Website

• http://jianwei.ie.cuhk.edu.hk/teaching/IERG5330Fall2016/index.html

• How to get there

• Google “Jianwei Huang”

• Go to Teaching

• Please check regularly (at least twice a week) for important notices

11

Textbook

12

Key References

13

Assessments• Homework (30%)

• In-Class Participation (5%): answer or ask good questions

• Paper presentation (20%): form a group of 2, present a paper from a recommended list for 20 mins, and answer some tough questions

• Project (45%):

• Choose one of the three project types: (a) formulate and solve a new NetEcon problem, (b) conduct a comprehensive survey of a NetEcon topic, (c) perform in-depth generalization of a NetEcon paper

• Submit a report and give a presentation14

Questions?

15