Heterogeneity and Network Structure in the Dynamics of Diffusion: Comparing Agent-Based and Differential Equation Models

Hazhir Rahmandad () and John Sterman ()
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Hazhir Rahmandad: Department of Industrial and Systems Engineering, Virginia Tech, Falls Church, Virginia 22043
John Sterman: Sloan School of Management, Massachusetts Institute of Technology, Cambridge, Massachusetts 02142

Management Science, 2008, vol. 54, issue 5, 998-1014

Abstract: When is it better to use agent-based (AB) models, and when should differential equation (DE) models be used? Whereas DE models assume homogeneity and perfect mixing within compartments, AB models can capture heterogeneity across individuals and in the network of interactions among them. AB models relax aggregation assumptions, but entail computational and cognitive costs that may limit sensitivity analysis and model scope. Because resources are limited, the costs and benefits of such disaggregation should guide the choice of models for policy analysis. Using contagious disease as an example, we contrast the dynamics of a stochastic AB model with those of the analogous deterministic compartment DE model. We examine the impact of individual heterogeneity and different network topologies, including fully connected, random, Watts-Strogatz small world, scale-free, and lattice networks. Obviously, deterministic models yield a single trajectory for each parameter set, while stochastic models yield a distribution of outcomes. More interestingly, the DE and mean AB dynamics differ for several metrics relevant to public health, including diffusion speed, peak load on health services infrastructure, and total disease burden. The response of the models to policies can also differ even when their base case behavior is similar. In some conditions, however, these differences in means are small compared to variability caused by stochastic events, parameter uncertainty, and model boundary. We discuss implications for the choice among model types, focusing on policy design. The results apply beyond epidemiology: from innovation adoption to financial panics, many important social phenomena involve analogous processes of diffusion and social contagion.

Keywords: agent-based models; networks; scale free; small world; heterogeneity; epidemiology; simulation; system dynamics; complex adaptive systems; SEIR model (search for similar items in EconPapers)
Date: 2008
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Citations: View citations in EconPapers (123)

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