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Diffusion and cascading behavior in random networks

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  • Lelarge, Marc

Abstract

The spread of new ideas, behaviors or technologies has been extensively studied using epidemic models. Here we consider a model of diffusion where the individualsʼ behavior is the result of a strategic choice. We study a simple coordination game with binary choice and give a condition for a new action to become widespread in a random network. We also analyze the possible equilibria of this game and identify conditions for the coexistence of both strategies in large connected sets. Finally we look at how can firms use social networks to promote their goals with limited information. Our results differ strongly from the one derived with epidemic models and show that connectivity plays an ambiguous role: while it allows the diffusion to spread, when the network is highly connected, the diffusion is also limited by high-degree nodes which are very stable.

Suggested Citation

  • Lelarge, Marc, 2012. "Diffusion and cascading behavior in random networks," Games and Economic Behavior, Elsevier, vol. 75(2), pages 752-775.
  • Handle: RePEc:eee:gamebe:v:75:y:2012:i:2:p:752-775
    DOI: 10.1016/j.geb.2012.03.009
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    References listed on IDEAS

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    Cited by:

    1. Kreindler, Gabriel E. & Young, H. Peyton, 2013. "Fast convergence in evolutionary equilibrium selection," Games and Economic Behavior, Elsevier, vol. 80(C), pages 39-67.
    2. Azomahou, T. & Opolot, D., 2014. "Stability and strategic diffusion in networks," MERIT Working Papers 035, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    3. Hamed Amini & Andreea Minca, 2014. "Inhomogeneous Financial Networks and Contagious Links," Working Papers hal-01081559, HAL.
    4. Oyama, Daisuke & Takahashi, Satoru, 2015. "Contagion and uninvadability in local interaction games: The bilingual game and general supermodular games," Journal of Economic Theory, Elsevier, vol. 157(C), pages 100-127.

    More about this item

    Keywords

    Social networks; Diffusion; Random graphs; Empirical distribution;

    JEL classification:

    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation

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