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Diffusion of Behavior and Equilibrium Properties in Network Games

Jackson, Matthew O. and Yariv, Leeat (2006) Diffusion of Behavior and Equilibrium Properties in Network Games. Social Science Working Paper, 1264. California Institute of Technology , Pasadena, CA. (Unpublished)

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We analyze games on social networks where agents select one of two actions (whether or not to adopt a new technology, withdraw money from the bank, become politically active, etc.). Agents' payoffs from each of the two actions depend on how many neighbors she has, the distribution of actions among her neighbors, and a possibly idiosyncratic cost for each of the actions. We analyze the diffusion of behavior when in each period agents choose a best response to last period's behavior. We characterize how the equilibrium points of such a process and their stability depend on the network architecture, the distribution of costs, and the payoff structure. We also illustrate how the dynamics of behavior depends on the number of neighbors that agents have. Our results have implications and applications to marketing, epidemiology, financial contagions, and technology adoption.

Item Type:Report or Paper (Working Paper)
Jackson, Matthew O.0000-0001-9846-4249
Additional Information:We are grateful for financial support from the Center for Advanced Studies in the Behavioral Sciences and the Guggenheim Foundation.
Group:Social Science Working Papers
Funding AgencyGrant Number
Center for Advanced Study in the Behavioral SciencesUNSPECIFIED
John Simon Guggenheim FoundationUNSPECIFIED
Subject Keywords:Diffusion, Social Networks, Tipping, Technology Adoption, Coordination.
Series Name:Social Science Working Paper
Issue or Number:1264
Classification Code:JEL: C45, C70, C73, D85, L15
Record Number:CaltechAUTHORS:20170801-085146282
Persistent URL:
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:79660
Deposited By: Hanna Storlie
Deposited On:01 Aug 2017 20:33
Last Modified:03 Oct 2019 18:22

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