Follow the Leader: Simulations on a Dynamic Social Network

David Goldbaum ()

No 155, Working Paper Series from School of Finance and Economics, University of Technology, Sydney

Abstract: An agent based model is developed in which a social hierarchy of leaders and followers emerges from a uniform or random social network. The formation of the social structure is driven by the desire to be an early adopter of a subsequently popular trend. The environment is related to a majority game, but introduces the importance of the timing of adoption. The proposed environment is relevant to a number of settings in which leadership and timing of decisions are important or being perceived as a trend setter is rewarded. The leadership position can be selfreinforcing. For a professional critic, for example, a cult-of-personality can dictate popular tastes, such as in art, food, and wine markets. A social hierarchy can also apply to the introduction of new products or ideas including academic research and financial market analysts.

Keywords: dynamic network; social interaction; consumer choice (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cbe, nep-cmp, nep-net and nep-soc
Date: 2008-10-01
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