Diffusion and Emergence in Social Networks

Diffusion and Emergence in Social Networks

Akira Namatame (National Defense Academy, Japan)
DOI: 10.4018/978-1-60566-798-0.ch010
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Diffusion is the process by which new products and practices are invented and successfully introduced into society. Numerous studies on the diffusion of individual innovations have been conducted, many exhibiting common features such as the famous S-shaped diffusion curve. One basic question posed by innovation diffusion is why there is often a long lag time between an innovation’s first appearance and the time when a substantial number of people have adopted it. An extensive amount of theoretical and empirical literature has been devoted to this phenomenon and the mechanisms behind it. New ideas, products, and innovations often take time to diffuse, a fact that is often attributed to the heterogeneity of human populations. In this chapter, we provide an overview of the research examining how the structure of social networks impacts the diffusion process. The diffusion process enhances innovations via feedback of information about the innovation’s utility—which can be used to make future improvements—to many different users. This aspect of the diffusion process is similar to the micro-macro loop, which is an essential part of emergence. The aim of this research is to understand how the structure of social networks determines the dynamics of various types of emergent properties occurring within those networks. For emergence at the social level, patterns of social interactions are critical.
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1. Introduction

For decades, social scientists, economists and physicists have been interested in the fundamental and widespread question of how infectious diseases, new technological practices, or the latest trends spread through society. When a new technology appears, society’s members have the chance to become aware of the innovations of the new technology and incorporate those innovations into their lives. The main study on diffusion modeling is based on the Bass model (Bass, 1969). The Bass diffusion model describes the process by which new products are adopted as an interaction between users and potential users. When an innovation is a product to be consumed by individuals, a single consumer can decide whether or not to adopt it.

More specifically, the Bass model formalizes the aggregate level of penetration of a new product, emphasizing two processes: external influence via advertising and mass media as well as internal influence via word-of-mouth. The decision of a consumer is described as the probability of the consumer adopting the new product at a specific time, and it is assumed to depend on both external and internal influences. The Bass model displays a cumulative S curve of adopters: when the number of users of a new product is plotted against time, the resulting curve shows an S-shaped distribution—adoption proceeds slowly at first, accelerates as it spreads throughout the potential adopting population, and then slows down as the relevant population becomes saturated. The S-shape is a natural implication of the observation that adoption is usually an absorbing state. The fast growth of diffusion is generated by the interaction between early adopters and late adopters. The Bass model, however, does not specify the consumer’s decision-making process or how consumers communicate with and influence one another at the micro level. The Bass model assumes the population of consumers to be homogeneous—such diffusion models are referred to as aggregate models.

Rosenberg (1972) observed two dominant characteristics of the diffusion process: the overall slowness of the process, on one hand, and the wide variations in the rates of acceptance of different inventions on the other. Empirical measurements and studies have since confirmed his view. Why is diffusion sometimes slow? Why is it faster in some regions than others? Why do rates of diffusion differ among different types of innovations? What factors govern the wide variation in diffusion rates? Hall (2003) provides a comparative historical perspective on diffusion that looks at the broad economic, social, and institutional determinants. In the modern world, markets occasionally accept innovations very slowly, despite technological advances. Chakravorti (2004) also provides many examples of the slow pace of fast change.

New ideas, products, and innovations often take time to diffuse, a fact that is often attributed to the heterogeneity of human populations. Global markets are now larger and more complex than ever before. As such, the amount of information available to consumers has considerably increased; as a result, consumers spend much more time thinking and hesitating before making a decision. Thus, consumers require more time to make personal decisions about matters such as whether to use a certain new product or participate in the latest technology.

Consumers may realize different aspects of the benefits and costs of a particular innovation, have different beliefs regarding benefits and costs, hear about the innovation at different times, or delay in acting on the information they receive. Young (2007) analyzes the effects of incorporating heterogeneity into three broad classes of models: contagion, social influence, and social learning. In addition, when a consumer has many neighbors, these represent many potential sources of information, and the consumer may have problems effectively handling such a large amount of information. Clarification of this relationship calls for analysis of the types of social interactions linking various individuals within a society.

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