Diffusion dynamics in small-world networks with heterogeneous consumers |
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Authors: | Sebastiano A Delre Wander Jager Marco A Janssen |
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Institution: | (1) Faculty of Management and Organization, Department of Marketing, University of Groningen, P.O. Box 800, 9700 AV Groningen, The Netherlands;(2) School of Human Evolution and Social Change & Department of Computer Science and Engineering, Arizona State University, Box 872402, Tempe, AZ 85287-2402, USA |
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Abstract: | Diffusions of new products and technologies through social networks can be formalized as spreading of infectious diseases.
However, while epidemiological models describe infection in terms of transmissibility, we propose a diffusion model that explicitly
includes consumer decision-making affected by social influences and word-of-mouth processes. In our agent-based model consumers’
probability of adoption depends on the external marketing effort and on the internal influence that each consumer perceives
in his/her personal networks. Maintaining a given marketing effort and assuming its effect on the probability of adoption
as linear, we can study how social processes affect diffusion dynamics and how the speed of the diffusion depends on the network
structure and on consumer heterogeneity. First, we show that the speed of diffusion changes with the degree of randomness
in the network. In markets with high social influence and in which consumers have a sufficiently large local network, the
speed is low in regular networks, it increases in small-world networks and, contrarily to what epidemic models suggest, it
becomes very low again in random networks. Second, we show that heterogeneity helps the diffusion. Ceteris paribus and varying
the degree of heterogeneity in the population of agents simulation results show that the more heterogeneous the population,
the faster the speed of the diffusion. These results can contribute to the development of marketing strategies for the launch
and the dissemination of new products and technologies, especially in turbulent and fashionable markets.
This paper won the best student paper award at the North American Association for Computational Social and Organizational
Science (NAACSOS) Conference 2005, University of Notre Dame, South Bend, Indiana, USA.
Preceding versions of this paper have been presented to the Conference of the North American Association for Computational
Social and Organizational Science (NAACSOS), 2005, University of Notre Dame, South Bend, USA and to the Conference of the
European Social Simulation Association (ESSA), 2005, Koblenz, Germany.
Sebastiano Alessio Delre received his Master Degree in Communication Science at the University of Salerno. After one year collaboration at the Institute
of Science and Technologies of Cognition (ISTC, Rome, Italy), now he is a PhD student at the faculty of economics, University
of Groningen, the Netherlands. His work focus on how different network structures affect market dynamics. His current application
domain concerns Agent-Based Simulation Models for social and economic phenomena like innovation diffusion, fashions and turbulent
market.
Wander Jager is an associate professor of marketing at the University of Groningen. He studied social psychology and obtained his PhD
in the behavioral and social sciences, based on a dissertation about the computer modeling of consumer behaviors in situations
of common resource use. His present research is about consumer decision making, innovation diffusion, market dynamics, crowd
behavior, stock-market dynamics and opinion dynamics. In his work he combines methods of computer simulation and empirical
surveys. He is involved in the management committee of the European Social Simulation Association (ESSA).
Marco Janssen is an assistant professor in the School of Human Evolution and Social Change and in the Department of Computer Science and
Engineering at Arizona State University. He got his degrees in Operations Research and Applied Mathematics. During the last
15 years, he uses computational tools to study social phenomena, especially human-environmental interactions. His present
research focuses on diffusion dynamics, institutional innovation and robustness of social-ecological systems. He combined
computational studies with laboratory and field experiments, case study analysis and archeological data. He is an associate
editor-in-chief of the journal Ecology and Society. |
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Keywords: | Innovation diffusion Threshold models Word-of-mouth Social networks Heterogeneous markets |
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