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Social Learning in Social Networks

Research and Teaching Output of the MIT Community

Show simple item record Lamberson, Peter John 2011-03-04T17:53:38Z 2011-03-04T17:53:38Z 2010-08 2009-10
dc.identifier.issn 1935-1704
dc.description.abstract This paper analyzes a model of social learning in a social network. Agents decide whether or not to adopt a new technology with unknown payoffs based on their prior beliefs and the experiences of their neighbors in the network. Using a mean-field approximation, we prove that the diffusion process always has at least one stable equilibrium, and we examine the dependence of the set of equilibria on the model parameters and the structure of the network. In particular, we show how first and second order stochastic dominance shifts in the degree distribution of the network impact diffusion. We find that the relationship between equilibrium diffusion levels and network structure depends on the distribution of payoffs to adoption and the distribution of agents' prior beliefs regarding those payoffs, and we derive the precise conditions characterizing those relationships. For example, in contrast to contagion models of diffusion, we find that a first order stochastic dominance shift in the degree distribution can either increase or decrease equilibrium diffusion levels depending on the relationship between agents' prior beliefs and the payoffs to adoption. Surprisingly, adding more links can decrease diffusion even when payoffs from the new technology exceed those of the status quo in expectation. en_US
dc.language.iso en_US
dc.publisher Berkeley Electronic Press en_US
dc.relation.isversionof en_US
dc.rights Article is made available in accordance with the publisher's policy and may be subject to US copyright law. Please refer to the publisher's site for terms of use. en_US
dc.source BEPress en_US
dc.title Social Learning in Social Networks en_US
dc.type Article en_US
dc.identifier.citation Lamberson, P. J. “Social Learning in Social Networks.” The B.E. Journal of Theoretical Economics 10.1 (2010): n. pag.Copyright c2010 The Berkeley Electronic Press en_US
dc.contributor.department Sloan School of Management en_US
dc.contributor.approver Lamberson, Peter John
dc.contributor.mitauthor Lamberson, Peter John
dc.relation.journal B E Journal of Theoretical Economics en_US
dc.identifier.mitlicense PUBLISHER_POLICY en_US
dc.eprint.version Final published version en_US
dc.type.uri en_US
eprint.status en_US
dspace.orderedauthors Lamberson, PJ en

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