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Competitive contagion in networks

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  • Goyal, Sanjeev
  • Heidari, Hoda
  • Kearns, Michael

Abstract

We develop a game-theoretic framework for the study of competition between firms who have budgets to “seed” the initial adoption of their products by consumers located in a social network. We identify a general property of the adoption dynamics — namely, decreasing returns to local adoption — for which the inefficiency of resource use at equilibrium (the Price of Anarchy) is uniformly bounded above, across all networks. We also show that if this property is violated, even the Price of Stability can be unbounded, thus yielding sharp threshold behavior for a broad class of dynamics. We provide similar results for a new notion, the Budget Multiplier, that measures the extent to which the imbalances in player budgets can be amplified at equilibrium.

Suggested Citation

  • Goyal, Sanjeev & Heidari, Hoda & Kearns, Michael, 2019. "Competitive contagion in networks," Games and Economic Behavior, Elsevier, vol. 113(C), pages 58-79.
    • Handle: RePEc:eee:gamebe:v:113:y:2019:i:c:p:58-79
    DOI: 10.1016/j.geb.2014.09.002
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    Cited by:

    1. Comola, Margherita & Rusinowska, Agnieszka & Villeval, Marie Claire, 2024. "Competing for Influence in Networks through Strategic Targeting," IZA Discussion Papers 17315, Institute of Labor Economics (IZA).
    2. Margherita Comola & Agnieszka Rusinowska & Marie Claire Villeval, 2024. "Competing for Influence in Networks Through Strategic Targeting [En compétition pour l'influence dans les réseaux grâce au ciblage stratégique]," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-04706311, HAL.
    3. Zhongju Liao & Yan Liu & Mengsha Li, 2020. "Is environmental innovation contagious? A study on the mechanism of individual firms' environmental innovation affecting the industry," Sustainable Development, John Wiley & Sons, Ltd., vol. 28(6), pages 1787-1795, November.
    4. Arthur Campbell & C. Matthew Leister & Yves Zenou, 2020. "Word‐of‐mouth communication and search," RAND Journal of Economics, RAND Corporation, vol. 51(3), pages 676-712, September.
    5. Markus Brede, 2019. "How Does Active Participation Affect Consensus: Adaptive Network Model of Opinion Dynamics and Influence Maximizing Rewiring," Complexity, Hindawi, vol. 2019, pages 1-16, June.
    6. Toomas Hinnosaar, 2019. "Price Setting on a Network," Papers 1904.06757, arXiv.org.
    7. Elias Carroni & Paolo Pin & Simone Righi, 2020. "Bring a Friend! Privately or Publicly?," Management Science, INFORMS, vol. 66(5), pages 2269-2290, May.
    8. Foerster, Manuel & Hellmann, Tim & Vega-Redondo, Fernando, 2024. "Strategic use of social media influencer marketing," UC3M Working papers. Economics 43985, Universidad Carlos III de Madrid. Departamento de Economía.
    9. Venel, Xavier, 2021. "Regularity of dynamic opinion games," Games and Economic Behavior, Elsevier, vol. 126(C), pages 305-334.
    10. Tabasso, Nicole, 2019. "Diffusion of multiple information: On information resilience and the power of segregation," Games and Economic Behavior, Elsevier, vol. 118(C), pages 219-240.
    11. Jiao, Qian & Xu, Jin, 2020. "Competition for networked agents in the lottery Blotto game," Economics Letters, Elsevier, vol. 197(C).

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    More about this item

    Keywords

    Competition; Network multipliers; Tullock contests; Viral marketing;
    All these keywords.

    JEL classification:

    • D00 - Microeconomics - - General - - - General
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation

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