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Diffusion in Social Networks and Market Stability

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2 Author(s)
Salamanos, N. ; Dept. of Inf., Athens Univ. of Econ. & Bus., Athens, Greece ; Konstantopoulos, D.

In this paper we propose a model of the evolution of a market with linear utilities in the presence of both local and global social interactions. In the scenario considered, there is a market consisting of buyers and divisible goods. In consecutive time periods, the decision of a buyer is affected by the consumption plan of his neighbors and by a global signal, the distribution of actions of all agents. Moreover, we assume that the market prices and the allocation of the goods are stabilized by the law of supply and demand. We simulate the model, along with a market equilibria algorithm, and we investigate the long time behavior of the system. Specifically, we analyze the distribution of the prices and the market share of the products, when the configuration of the network is Erdos-Renyi and Scale-free graph. The experimental results show that the long time behavior of the system is not always static. The long time states depict a periodic pattern and are sensitive to a) the initial agents' beliefs, b) the weights that each agent assigns to the local and the global factor respectively and c)the degree distribution of the nodes in the network.

Published in:

Intelligent Networking and Collaborative Systems (INCoS), 2011 Third International Conference on

Date of Conference:

Nov. 30 2011-Dec. 2 2011