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SSRN Electronic Journal
Article
License: CC BY NC
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The B E Journal of Theoretical Economics
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License: CC BY NC
Data sources: UnpayWall
SSRN Electronic Journal
Article . 2009 . Peer-reviewed
Data sources: Crossref
The B E Journal of Theoretical Economics
Article . 2010 . Peer-reviewed
Data sources: Crossref
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Social Learning in Social Networks

Authors: Lamberson, Peter John;

Social Learning in Social Networks

Abstract

This paper analyzes a model of social learning in a social network. Agents decide whether or not to adopt a new technology with unknown payoffs based on their prior beliefs and the experiences of their neighbors in the network. Using a mean-field approximation, we prove that the diffusion process always has at least one stable equilibrium, and we examine the dependence of the set of equilibria on the model parameters and the structure of the network. In particular, we show how first and second order stochastic dominance shifts in the degree distribution of the network impact diffusion. We find that the relationship between equilibrium diffusion levels and network structure depends on the distribution of payoffs to adoption and the distribution of agents' prior beliefs regarding those payoffs, and we derive the precise conditions characterizing those relationships. For example, in contrast to contagion models of diffusion, we find that a first order stochastic dominance shift in the degree distribution can either increase or decrease equilibrium diffusion levels depending on the relationship between agents' prior beliefs and the payoffs to adoption. Surprisingly, adding more links can decrease diffusion even when payoffs from the new technology exceed those of the status quo in expectation.

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Keywords

social networks, diffusion, mean-field analysis, stochastic dominance

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citations
This is an alternative to the "Influence" indicator, which also reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Citations provided by BIP!
popularity
This indicator reflects the "current" impact/attention (the "hype") of an article in the research community at large, based on the underlying citation network.
BIP!Popularity provided by BIP!
influence
This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Influence provided by BIP!
impulse
This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network.
BIP!Impulse provided by BIP!
19
Average
Average
Average
hybrid