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Influence networks

Author

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  • LOPEZ-PINTADO, Dunia

    (Universidad Pablo de Olavide, Department of Economics, Sevilla, Spain; Université catholique de Louvain, CORE, B-1348 Louvain-la-Neuve, Belgium)

Abstract

Some behaviors, ideas or technologies spread and become persistent in society, whereas others vanish. This paper analyzes the role of social influence in determining such distinct collective outcomes. Agents are assumed to acquire information from others through a certain sampling process that generates an influence network, and they use simple rules to decide whether to adopt or not depending on the observed sample. We characterize, as a function of the primitives of the model, the diffusion threshold (i.e., the spreading rate above which the adoption of the new behavior becomes persistent in the population) and the endemic state (i.e., the fraction of adopters in the stationary state of the dynamics). We find that the new behavior will easily spread in the population if there is a high correlation between how influential (visible) and how easily influenced an agent is, which is determined by the sampling process and the adoption rule. We also analyze how the density and variance of the out-degree distribution affect the diffusion threshold and the endemic state.

Suggested Citation

  • LOPEZ-PINTADO, Dunia, 2010. "Influence networks," LIDAM Discussion Papers CORE 2010083, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  • Handle: RePEc:cor:louvco:2010083
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    File URL: http://www.uclouvain.be/cps/ucl/doc/core/documents/coredp2010_83web.pdf
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    References listed on IDEAS

    as
    1. Bramoulle, Yann & Kranton, Rachel, 2007. "Public goods in networks," Journal of Economic Theory, Elsevier, vol. 135(1), pages 478-494, July.
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    More about this item

    Keywords

    social influence; networks; diffusion threshold; endemic state;
    All these keywords.

    JEL classification:

    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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