Diffusion dynamics in small-world networks with heterogeneous consumers

Sebastiano A. Delre, Wander Jager, Marcus Janssen

Research output: Contribution to journalArticle

116 Citations (Scopus)

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.

Original languageEnglish (US)
Pages (from-to)185-202
Number of pages18
JournalComputational and Mathematical Organization Theory
Volume13
Issue number2
DOIs
StatePublished - Jun 2007

Fingerprint

Small-world networks
Small-world Network
Social Influence
Marketing
Epidemiological Model
Agent-based Model
Random Networks
Infectious Diseases
Epidemic Model
Diffusion Model
Network Structure
Diffusion Process
Randomness
Social Networks
Infection
Decision Making
Small-world network
Heterogeneous consumers
Internal
Decision making

Keywords

  • Heterogeneous markets
  • Innovation diffusion
  • Social networks
  • Threshold models
  • Word-of-mouth

ASJC Scopus subject areas

  • Computational Theory and Mathematics

Cite this

Diffusion dynamics in small-world networks with heterogeneous consumers. / Delre, Sebastiano A.; Jager, Wander; Janssen, Marcus.

In: Computational and Mathematical Organization Theory, Vol. 13, No. 2, 06.2007, p. 185-202.

Research output: Contribution to journalArticle

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