Diffusion dynamics in small-world networks with heterogeneous consumers

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.     

Relational dominant strategy equilibrium as a generalization of dominant strategy equilibrium in terms of a social psychological aspect of decision making

In this paper, incorporating a social psychological aspect of decision making, called attitudes, into analysis of games in normal form, the author proposes a new equilibrium concept, called relational dominant strategy equilibrium (RDSE). The author also analyzes relationships between RDSE and dominant strategy equilibrium (DSE), and shows the following fact: RDSE coincides with DSE under a condition on attitudes of players. The story of “The Gift of the Magi” by Henry is analyzed and given a convincing interpretation using the proposed equilibrium concept.     

Where do we stand on econophysics?

This issue contains papers selected from the contributions presented at the 5th International Conference on “Applications of Physics in Financial Analysis” (APFA5) held in Torino from June 29th to July 1st, 2006 (http://www.polito.it/apfa5). The issue collects recent applications of models and methods of statistical physics to economic problems. This interdisciplinary field of research, known as Econophysics, has seen intensive growth over the last decade. The challenge for econophysicists will be to go beyond the traditional views of economics and physics unifying the separate lines of development followed by the two disciplines over great part of the 20th century.“The conventional view serves to protect us from the painful job of thinking”, John Kenneth Galbraith (1908-2006).     

Model of prison riots

We present a model of a prison with two types of inmates. One (recidivists) is a better organized and has more influence on the formation of opinions, whereas the second one is more susceptible to the influence of internal and external pressure. We study, via computer simulations, the interplay between well-organized minority and the rest and how the final decision, like e.g. starting a riot, depends on such factors as: fraction of recidivists, their initial support of the riot and possibility of contacts among cells. We find that, as expected, the riot is more likely to start if there is more recidivists favoring it at the beginning. The influence of external factors (media) turned out to have a larger impact on the second group of prisoners. Contrary to a common practice, we show that in order to prevent riots it might be better not to block the inter-cell contacts.     

Ising,Schelling and self-organising segregation

The similarities between phase separation in physics and residential segregation by preference in the Schelling model of 1971 are reviewed. Also, new computer simulations of asymmetric interactions different from the usual Ising model are presented, showing spontaneous magnetisation (=self-organising segregation) and in one case a sharp phase transition.     

Agreement dynamics of finite-memory language games on networks

We propose a Finite-Memory Naming Game (FMNG) model with respect to the bounded rationality of agents or finite resources for information storage in communication systems. We study its dynamics on several kinds of complex networks, including random networks, small-world networks and scale-free networks. We focus on the dynamics of the FMNG affected by the memory restriction as well as the topological properties of the networks. Interestingly, we found that the most important quantity, the convergence time of reaching the consensus, shows some non-monotonic behaviors by varying the average degrees of the networks with the existence of the fastest convergence at some specific average degrees. We also investigate other main quantities, such as the success rate in negotiation, the total number of words in the system and the correlations between agents of full memory and the total number of words, which clearly explain the nontrivial behaviors of the convergence. We provide some analytical results which help better understand the dynamics of the FMNG. We finally report a robust scaling property of the convergence time, which is regardless of the network structure and the memory restriction.     

The complexity of social groups and social systems described by graph structures

This paper presents methodology which permits the complete ranking of nondirected graphs (NDG's) on an attribute labelled ‘complexity.’ The technique applies to both small and large systems as might arise in studies of group or organization behavior. The methodology extends to cover the complexity of directed graphs (DG's) and permits the detailed specification of individual and group behavior.For the NDG an abstract automaton representing the participants' interaction or communications function is sited at each node. Each automaton is constructed so its internal complexity is sufficient to realize the minimal social action (e.g. transmission of a rumor and the path followed by the rumor) within the framework of the NDG. It is shown that the complexity of each node automaton depends upon the order of the graph, the degree of the node and the longest path parameter of the graph. The combined complexity of node automata constitutes the complexity of the NDG. The complexity of a DG is specified as a composition of complexities computed for the associated NDG and logical devices which produce the observed behavior. Illustrative examples pertaining to the committee-subcommittee problem and to organizational structures are presented.     

On non-binary social choice

In a recent paper Grether and Plott (1982) have extended Arrow's General Possibility Theorem to the case where choice over small (in particular ‘two-element’) sets may not be possible. This obviously raises the question whether the counterparts of other existing impossibility results will go through in the same framework. This note settles the question for the counterpart of the well-known impossibility theorem of Gibbard. By weakening the collective rationality condition of Arrow we show that all the social choice functions will be ‘oligarchical’ in Gibbard's sense, in the Grether and Plott (1982) framework.     

On structuring problems of job design met in the development and maintenance of information systems

In the development and maintenance of information systems data processing tasks are assigned either to a computer or to a man. In this paper we consider five decisions made during the development phase. These decisions have an influence on the contents of jobs: 1. distribution of work between man and computer, 2. construction of man-computer interface, 3. grouping tasks into jobs, 4. design of control part of new information system, 5. assignment of people to jobs.During the use of an information system both the person and his job will change. Here various combinations of changes in a person-job pair are classified and analyzed.This research has been supported by the Academy of Finland.