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Unstable diffusion in social networks

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  • Kobayashi, Teruyoshi
  • Ogisu, Yoshitaka
  • Onaga, Tomokatsu

Abstract

How and to what extent will new activities spread through social ties? To answer this question, we present an analytical framework that allows us to describe the diffusion dynamics on complex networks more accurately than the conventional mean-field approach. Based on two classes of network games, we find that the spread of multiple activities is expressed as a saddle path, and thus, inherently unstable. In particular, when the two activities are sufficiently substitutable, either of them will dominate the other by chance even if they are equally attractive ex ante. We argue that, in environments where such symmetry-breaking occurs, any average-based approximation method may not correctly capture the Nash equilibrium — the steady state of an actual diffusion process.

Suggested Citation

  • Kobayashi, Teruyoshi & Ogisu, Yoshitaka & Onaga, Tomokatsu, 2023. "Unstable diffusion in social networks," Journal of Economic Dynamics and Control, Elsevier, vol. 146(C).
  • Handle: RePEc:eee:dyncon:v:146:y:2023:i:c:s0165188922002640
    DOI: 10.1016/j.jedc.2022.104561
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    More about this item

    Keywords

    Social network; Diffusion; Coordination game; Mean-field method; Master equations;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation

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