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I recently attended a talk at Cornell by a guy who is due to start working at Google soon. He had not started working there, but presumably he was hired on the

I recently attended a talk at Cornell by a guy who is due to start working at Google soon. He had not started working there, but presumably he was hired on the basis of the work he described, and he was explicitly interested in applying his framework to the Google social network. He was working on a scheme to get people to recommend things to their friends in return for discounts on those things. His central focus was on devising a payout scheme in which people's economically optimal strategy is honestly reporting the cost of making the recommendation, and then choosing the optimum set of people with whom to make this deal for a given budget. Optimum in the sense of influencing the most people with the recommendations.

samstave 15y ago
>He was working on a scheme to get people to recommend things to their friends in return for discounts on those things." KILL IT WITH FIRE!
- daenz 15y ago
  This is what our brilliant minds work on, because they're chasing that damn dollar.
  - mindslight 15y ago
    You can never fully escape economics, but I think a better way of looking at it is overemphasizing micro-optimization while being stuck in a small local maximum.
sparsevector 15y ago
This work sounds interesting. Who was the talk by? It sounds like a student of Jon Kleinberg but I quick glance over his publications didn't reveal work on that kind of mechanism design problem.
- Estragon 15y ago
  It was this talk: http://events.cornell.edu/event/orie_colloquium_yaron_singer_google_-_incentives_algorithms_and_networks_mechanism_design_in_the_era_of_the_social_web http://events.cornell.edu/event/orie_colloquium_yaron_singer...
anonymoushn 15y ago
Is there a reasonable means to prevent people from spamming their friends to get the discount and then saying over some more trusted channel "Please disregard the spam, I haven't tried this thing and don't know whether it is good yet?"
- laxatives 15y ago
  You could reward recommendations that result in more recommendations since (hopefully anyway), people won't recommend spam to others. Then you could encourage good products spreading rapidly. But then there's a delay to the reward and users could lose interest. You could also end up dominated by a few power users.
- Estragon 15y ago
  No, there were aspects of it that I couldn't see the practical application of.
- InclinedPlane 15y ago
  That's small compared to the problem of arbitrage in such a scheme. Start by spamming people to buy something which gives them the largest dollar value discount on an item they don't actually want, then sell part of the discount to someone who wants it and pocket the profit.
moonchrome 15y ago
Internet Amway ?
mindslight 15y ago
It's occurred to me that the ultimate answer is embodied by the classic Feynman chapter title "You just ask them". You've got Facebook raising money at over $50 per user based on the promise of futureperfect GMO (ie trying to imitate organic) targeted advertising. Google is so worried, they're gutting their core strength and namesake to become more 'social' by facilitating pop culture, as if it were hard to find. Clearly everyone on the web wishes they were buying things all the time, but just doesn't know it yet. Meanwhile, Pinterest comes along and stumbles into creating a community where people curate pictures, many of stuff they desire to buy either now or in the future - inherently social status symbols. They skip ads, double-down on their ability to drive sales, and directly monetize affiliate links. It seems like "Fail fast" has a corollary of "Context is king" - If you end up with all of the cat-picture-posting users in the world, and that's what users view your site as being for, you're never going to have better monetization than generic ads.
- InclinedPlane 15y ago
  Exactly. Advertising works least well when it's spam, slightly better when it's targeted, and best of all when it's a personal endorsement from someone you trust. When Alton Brown tells you to buy Shun knives or when Penny Arcade tells you to play SW:TOR that has a lot more impact than a random ad for wicker furniture or what-have-you. That's something that google and facebook are working towards but perhaps they are working too indirectly.
  - mindslight 15y ago
    But the whole financial sell of Facebook is that they're purporting to work towards something better than targeted advertising. Due to increase in volume of communication between people, targeted advertising is going to be eclipsed by social recommendations. But Pinterest could never have been Facebook/Pin, because half of the second N in Metcalfe's law doesn't want to see dresses and shoes.

samstave 15y ago

>He was working on a scheme to get people to recommend things to their friends in return for discounts on those things." KILL IT WITH FIRE!

daenz 15y ago
This is what our brilliant minds work on, because they're chasing that damn dollar.
- mindslight 15y ago
  You can never fully escape economics, but I think a better way of looking at it is overemphasizing micro-optimization while being stuck in a small local maximum.

sparsevector 15y ago

This work sounds interesting. Who was the talk by? It sounds like a student of Jon Kleinberg but I quick glance over his publications didn't reveal work on that kind of mechanism design problem.

Estragon 15y ago
It was this talk: http://events.cornell.edu/event/orie_colloquium_yaron_singer_google_-_incentives_algorithms_and_networks_mechanism_design_in_the_era_of_the_social_web http://events.cornell.edu/event/orie_colloquium_yaron_singer...

anonymoushn 15y ago

Is there a reasonable means to prevent people from spamming their friends to get the discount and then saying over some more trusted channel "Please disregard the spam, I haven't tried this thing and don't know whether it is good yet?"

laxatives 15y ago
You could reward recommendations that result in more recommendations since (hopefully anyway), people won't recommend spam to others. Then you could encourage good products spreading rapidly. But then there's a delay to the reward and users could lose interest. You could also end up dominated by a few power users.
Estragon 15y ago
No, there were aspects of it that I couldn't see the practical application of.
InclinedPlane 15y ago
That's small compared to the problem of arbitrage in such a scheme. Start by spamming people to buy something which gives them the largest dollar value discount on an item they don't actually want, then sell part of the discount to someone who wants it and pocket the profit.

moonchrome 15y ago

Internet Amway ?

mindslight 15y ago

It's occurred to me that the ultimate answer is embodied by the classic Feynman chapter title "You just ask them". You've got Facebook raising money at over $50 per user based on the promise of futureperfect GMO (ie trying to imitate organic) targeted advertising. Google is so worried, they're gutting their core strength and namesake to become more 'social' by facilitating pop culture, as if it were hard to find. Clearly everyone on the web wishes they were buying things all the time, but just doesn't know it yet. Meanwhile, Pinterest comes along and stumbles into creating a community where people curate pictures, many of stuff they desire to buy either now or in the future - inherently social status symbols. They skip ads, double-down on their ability to drive sales, and directly monetize affiliate links. It seems like "Fail fast" has a corollary of "Context is king" - If you end up with all of the cat-picture-posting users in the world, and that's what users view your site as being for, you're never going to have better monetization than generic ads.

InclinedPlane 15y ago
Exactly. Advertising works least well when it's spam, slightly better when it's targeted, and best of all when it's a personal endorsement from someone you trust. When Alton Brown tells you to buy Shun knives or when Penny Arcade tells you to play SW:TOR that has a lot more impact than a random ad for wicker furniture or what-have-you. That's something that google and facebook are working towards but perhaps they are working too indirectly.
- mindslight 15y ago
  But the whole financial sell of Facebook is that they're purporting to work towards something better than targeted advertising. Due to increase in volume of communication between people, targeted advertising is going to be eclipsed by social recommendations. But Pinterest could never have been Facebook/Pin, because half of the second N in Metcalfe's law doesn't want to see dresses and shoes.