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The Network Dynamics of Social and Technological Conventions

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  • Joshua Becker

Abstract

The selection of social and technological conventions represents an important form of collective decision-making. While the ergodic properties of coordination models suggest that the optimal strategy will spread in the long run, lock-in effects mean that the first strategy to obtain widespread adoption is likely to stick--it's possible for everyone to do one thing but prefer another. The present paper examines how network structure impacts the likelihood that the optimal strategy will be widely adopted as the first equilibrium. This analysis focuses on the role of central nodes, which play a beneficial role in spreading innovations by increasing the speed of adoption, but can inadvertently promote suboptimal solutions at the expense of other, better solutions. Centralized networks have a faster rate of convention formation but a lower likelihood of optimal selection. Surprisingly, however, this finding does not indicate a speed/optimality tradeoff: dense networks are both fast and optimal.

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  • Joshua Becker, 2020. "The Network Dynamics of Social and Technological Conventions," Papers 2003.12112, arXiv.org, revised Dec 2021.
  • Handle: RePEc:arx:papers:2003.12112
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    References listed on IDEAS

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