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Networks, Percolation, and Consumer Demand

In particular, we showed that small-world networks, which exhibit short path lengths and high clustering (Watts & Strogatz 1998), lead to fast but often only limited diffusion compared to fully random networks, which exhibit short path lengths and low clustering. The reason for limited diffusion in small-world networks is the redundancy in information spreading due to clustering. Accordingly, consumer welfare is much lower in small-world networks than in random networks for a wide ranges of prices.

#twiangulate #diffusion - jasss.org

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