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Diffusion of behavior in dynamic networks


König, Michael D (2016). Diffusion of behavior in dynamic networks. Working paper series / Department of Economics 222, University of Zurich.

Abstract

We analyze binary choice models in communication networks, in which both, the formation of links in the network as well as the action choices are endogenous. We provide a complete characterization of the equilibrium action choices and networks, where agents choose their strategies - actions and links - according to a perturbed best response update rule. We show that a threshold exists in the linking cost and the conformity parameter, giving rise to either a sparse or a densely connected communication network. Moreover, we show how the theoretical model can be efficiently estimated using cross sectional data on agents choices and their network of interactions.

We analyze binary choice models in communication networks, in which both, the formation of links in the network as well as the action choices are endogenous. We provide a complete characterization of the equilibrium action choices and networks, where agents choose their strategies - actions and links - according to a perturbed best response update rule. We show that a threshold exists in the linking cost and the conformity parameter, giving rise to either a sparse or a densely connected communication network. Moreover, we show how the theoretical model can be efficiently estimated using cross sectional data on agents choices and their network of interactions.

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Additional indexing

Item Type:Working Paper
Communities & Collections:03 Faculty of Economics > Department of Economics
Working Paper Series > Department of Economics
Dewey Decimal Classification:330 Economics
JEL Classification:D74, D72, D71, D83, C72
Uncontrolled Keywords:Diffusion, technology adoption, networks, riots, protests, Arab spring
Language:English
Date:March 2016
Deposited On:29 Mar 2016 11:49
Last Modified:05 Apr 2016 20:12
Series Name:Working paper series / Department of Economics
Number of Pages:17
ISSN:1664-7041
Official URL:http://www.econ.uzh.ch/static/wp/econwp222.pdf
Related URLs:http://www.econ.uzh.ch/static/workingpapers-new.php
Permanent URL: https://doi.org/10.5167/uzh-123553

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