Publication detail

Diffusion Processes on Complex Networks

Author(s): PhDr. Petr Švarc ,
PhDr. Natálie Švarcová Ph.D.,
Type: IES Working Papers
Year: 2009
Number: 27
Published in: IES Working Papers 27/2009
Publishing place: Prague
Keywords: innovation diffusion, complex networks, scale-free networks
JEL codes: O31, O33
Suggested Citation: Švarcová, N., Švarc P. (2009). “ Diffusion Processes on Complex Networks ” IES Working Paper 27/2009. IES FSV. Charles University.
Grants: 402/07/0890 GA CR (2007-2009): Network Approaches to Economic Modeling GAUK 32508 Economic models of diffusion processes in networks with different topologies
Abstract: In this paper we apply agent-based methodology on an issue that is fundamental for economic prosperity and growth: the diffusion of innovations. The diffusion of innovations is one of the topics where agent-based simulation is an extremely fruitful method allowing not only the observation of stable states but also the process and development of the diffusion. Furthermore, empirical studies revealed that the topological structure of interactions among individuals importantly influences the diffusion’s course and outcomes. We analyze diffusion outcomes for five different topologies, assuming markets where individuals are highly influenced by the adoption decision of their peers and innovations are introduced into the markets in two different ways: mass media campaigns and seeding procedures. Our results indicate that the topology of the relations among individuals importantly influences the speed and development of the diffusion process as well as final market penetration. Scale free topology seems to promote fast innovation diffusion, at the same time being characterized by the high uncertainty of the diffusion outcomes. Less heterogeneous networks (small worlds, two-dimensional lattice and ring) yield a much slower diffusion of the innovation, at the same time being much less unpredictable than scale free topology.
Downloadable: WP 2009_27_Svarcova, Svarc


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