Publication detail

Technology adoption and herding behavior in complex social networks (submitted to IES WP)

Author(s): PhDr. Petr Švarc , Natálie Švarcová
Type: Articles in refereed journals
Year: 2007
Number:
ISSN / ISBN:
Published in: submitted to IES WP
Publishing place:
Keywords: technology adoption, simulation, networks, herding behavior
JEL codes: O33, C15
Suggested Citation:
Grants: IES Research Framework Institutional task (2005-2011) Integration of the Czech economy into European union and its development
Abstract: Using simple computational model we study consequences of herding behavior in population of agents connected in networks with different topologies: random networks, small-world networks and scale-free networks. Agents sequentially choose between two technologies using very simple rules based on the previous choice of their immediate neighbors. We show that different seeding of technologies can lead to very different results in the choice of majority of agents. We mainly focus on the situation where one technology is seeded randomly while seeding of the second technology is targeted to highly connected agents – hubs. We show that even if the initial seeding is positively biased toward the first technology (more agents start with the choice of the first technology) the dynamic of the model can result in the majority choosing second technology under condition that the seeding of the second technology is targeted on hubs. Even if the change to majority choice is highly improbable targeted seeding can lead to more favorable results. The results are important both for decision of firms and government policies.

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