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Diffusion and contagion in networks with heterogeneous agents and homophily

Author

Listed:
  • Matthew O. Jackson

    () (Department of Economics, Stanford University, Santa Fe Institute, and CIFAR)

  • Dunia López Pintado

    () (Department of Economics, Universidad Pablo de Olavide)

Abstract

We study how a behavior (an idea, buying a product, having a disease, adopting a cultural fad or a technology) spreads among agents in an a social network that exhibits segregation or homophily (the tendency of agents to associate with others similar to themselves). Individuals are distinguished by their types (e.g., race, gender, age, wealth, religion, profession, etc.) which, together with biased interaction patterns, induce heterogeneous rates of adoption. We identify the conditions under which a behavior diffuses and becomes persistent in the population. These conditions relate to the level of homophily in a society, the underlying proclivities of various types for adoption or infection, as well as how each type interacts with its own type. In particular, we show that homophily can facilitate diffusion from a small initial seed of adopters.

Suggested Citation

  • Matthew O. Jackson & Dunia López Pintado, 2011. "Diffusion and contagion in networks with heterogeneous agents and homophily," Working Papers 11.14, Universidad Pablo de Olavide, Department of Economics.
    • Handle: RePEc:pab:wpaper:11.14
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    References listed on IDEAS

    as
    1. Sergio Currarini & Matthew O. Jackson & Paolo Pin, 2009. "An Economic Model of Friendship: Homophily, Minorities, and Segregation," Econometrica, Econometric Society, vol. 77(4), pages 1003-1045, July.
    2. Banerjee, Abhijit & Chandrasekhar, Arun G & Duflo, Esther & Jackson, Matthew O., 2012. "The Diffusion of Microfinance," CEPR Discussion Papers 8770, C.E.P.R. Discussion Papers.
    3. Dunia López-Pintado, 2006. "Contagion and coordination in random networks," International Journal of Game Theory, Springer;Game Theory Society, vol. 34(3), pages 371-381, October.
    4. López-Pintado, Dunia, 2008. "Diffusion in complex social networks," Games and Economic Behavior, Elsevier, vol. 62(2), pages 573-590, March.
    5. Andrea Galeotti & Sanjeev Goyal & Matthew O. Jackson & Fernando Vega-Redondo & Leeat Yariv, 2010. "Network Games," Review of Economic Studies, Oxford University Press, vol. 77(1), pages 218-244.
    6. Jackson Matthew O. & Rogers Brian W., 2007. "Relating Network Structure to Diffusion Properties through Stochastic Dominance," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 7(1), pages 1-16, February.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Rong, Rong & Houser, Daniel, 2015. "Growing stars: A laboratory analysis of network formation," Journal of Economic Behavior & Organization, Elsevier, vol. 117(C), pages 380-394.
    2. Bryan S. Graham, 2014. "An econometric model of link formation with degree heterogeneity," NBER Working Papers 20341, National Bureau of Economic Research, Inc.
    3. Muñoz, Francisco & Nuño, Juan Carlos & Primicerio, Mario, 2015. "Effects of inspections in small world social networks with different contagion rules," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 432(C), pages 76-86.
    4. repec:eee:gamebe:v:105:y:2017:i:c:p:155-176 is not listed on IDEAS
    5. Bryan S. Graham, 2017. "An econometric model of network formation with degree heterogeneity," CeMMAP working papers CWP08/17, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
    6. repec:spr:series:v:8:y:2017:i:1:d:10.1007_s13209-016-0152-7 is not listed on IDEAS
    7. Panebianco, Fabrizio & Verdier, Thierry, 2015. "Paternalism, Cultural Transmission and Diffusion on Complex Networks," CEPR Discussion Papers 10722, C.E.P.R. Discussion Papers.
    8. Matthew O. Jackson & Brian W. Rogers & Yves Zenou, 2017. "The Economic Consequences of Social-Network Structure," Journal of Economic Literature, American Economic Association, vol. 55(1), pages 49-95, March.
    9. Halberstam, Yosh & Knight, Brian, 2016. "Homophily, group size, and the diffusion of political information in social networks: Evidence from Twitter," Journal of Public Economics, Elsevier, vol. 143(C), pages 73-88.
    10. Jackson, Matthew O. & Rogers, Brian & Zenou, Yves, 2016. "Networks: An economic perspective," CEPR Discussion Papers 11452, C.E.P.R. Discussion Papers.
    11. Nicole Tabasso, 2015. "Diffusion of Multiple Information: On Information Resilience and the Power of Segregation," Working Papers 2015.55, Fondazione Eni Enrico Mattei.
    12. Panebianco, Fabrizio & Verdier, Thierry, 2017. "Paternalism, homophily and cultural transmission in random networks," Games and Economic Behavior, Elsevier, vol. 105(C), pages 155-176.
    13. Yang, Jianxia & Wu, John, 2013. "Strategic correlativity and network games," Economic Modelling, Elsevier, vol. 30(C), pages 663-669.

    More about this item

    Keywords

    Diffusion; Homophily; Segregation; Social Networks;

    JEL classification:

    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • C45 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Neural Networks and Related Topics

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