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Diffusion Games

Resource type
Author/contributor
Title
Diffusion Games
Abstract
Behaviors and information often spread via person-to-person diffusion. This paper highlights how diffusion processes can facilitate coordination. I study contagion in a discrete network with Bayesian players. In addition to characterizing the extent and rate of adoption, we uncover a new effect: when large cascades are possible in equilibrium, exposure conveys information about a player's network position. This effect underscores a novel trade-off in the design of marketing campaigns, suggesting conditions under which word-of-mouth is relatively more effective. A generalization of the model to multi-type networks suggests a new approach to targeted seeding.
Publication
American Economic Review
Volume
110
Issue
1
Pages
225-70
Date
2020-01
Citation
Sadler, E. (2020). Diffusion Games. American Economic Review, 110, 225–270.
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